Global Surfaces Ltd

Over the last 2 decades, we Global Surfaces Limited have remained at the forefront of manufacturing innovation, continuously expanding our robust product portfolio while staying committed to enriching our customers' experiences. Our journey has been driven by an unwavering focus on quality, sustainability, and care for our most valuable asset - the human capital. As we look back on our milestones, we remain inspired to build on our legacy and continue delivering excellence for many more years to come.

Dear Shareholders, Historic IPO and Listing

The maiden IPO of Global Surfaces Limited marked a significant milestone in our company's journey, one that was met with an overwhelming response. Our IPO was oversubscribed by more than 12 times, reflecting the strong confidence investors have in our business and future prospects. Today, we proudly stand as a family of over 13,000 valued shareholders. This is our first full year annual report following the company's successful listing at the main board of NSE & BSE, and it represents a turning point in our business strategy. I would like to take this opportunity to express my sincere gratitude to all our shareholders for their unwavering support and the positive reception to our IPO. Your trust and belief in our vision motivate us to strive for excellence and deliver sustained value to our stakeholders. We remain committed to building on this success and taking Global Surfaces to new heights.

Market overview

The global economic landscape has shown steady recovery with a projected growth of around 3% in 2024, supported by resilient consumer demand and easing inflationary pressures. The Indian economy remains robust with an anticipated growth rate of 7%, driven by strong domestic consumption, infrastructure development and favourable government policies. These economic trends have provided significant momentum to the engineered stone and natural stone industries. Globally, rising urbanization, real estate expansion, and increased investments in commercial and residential projects are driving demand for premium stone products. The engineered stone market, valued at approximately USD 25 billion, is set to grow at a CAGR of 5%, fuelled by preferences for durable, sustainable and aesthetic building materials.

In India, the thriving real estate and infrastructure sectors, coupled with growing exports, are enhancing the growth prospects for the stone industry. India's rich natural stone resources, along with government initiatives like the National Infrastructure Pipeline (NIP), are boosting the industry's outlook. This favourable economic environment is expected to propel demand for both engineered and natural stone products, enabling manufacturers to expand their market presence and cater to diverse global markets.

Performance overview

We continue to drive growth by focusing on innovation and technology, ensuring that we remain competitive in the market while enhancing our manufacturing efficiency, cost-effectiveness, and sustainability. We achieved a significant increase in turnover, rising from 1,780.66 Mn in 2022-23 to 2,252.91 Mn in 2023-24. Our EBITDA saw a modest rise, moving from 392.22 Mn in 2022-23 to 398.83 Mn in 2023-24.

Our long-term borrowings increased substantially, from 193.36 Mn in 2022-23 to 524.55 Mn in 2023-24, while our debt-to-equity ratio improved from 0.64 to 0.50 during the same period, reflecting prudent financial management. Networth also showed notable growth, increasing from 2,613.3 Mn in 2022-23 to 3,305.07 Mn in 2023-24.

A major milestone of our Company was the commence of our manufacturing facility at the Jebel Ali Free Trade Zone, Dubai, UAE, for producing engineered stone through a wholly owned subsidiary. Production at the said facility commenced in February 2024. This expansion resulted in the engineered stone segment's revenue contribution increasing from 1,557.37 Mn in 2022-23 to 2,072.50 Mn in 2023-24.

We also made strides in expanding our customer network, particularly across the North American continent, while further strengthening our presence across the global markets. Today, we proudly say that products manufactured by us are sold in several countries, including the United States, Canada, Australia, and the Middle East. In the current fiscal year, exports accounted for a remarkable 97% of the total operating revenue, highlighting our Company's growing global footprint and our commitment to expanding into new geographies.

We are continuously expanding our horizons, both in terms of scale and geography. Our diversified products offering have enabled us to adapt to evolving industry requirements and adopt transformations to benefit from the emerging opportunities.

Strategic initiatives

I am excited to announce a significant advancement in our technological capabilities. At our SEZ facility, we have recently introduced a state-of-the-art printing technology that would enhance our production of Quartz slabs. This new line complements our existing infrastructure, which includes two full moulding lines, one half moulding line, and one processing line, all supported by advanced ancillaries and utilities. With this innovative printing technology, we can now produce approximately 700 thousand square feet of high-quality printed slabs annually, reinforcing our commitment to excellence and meeting the evolving demands of our customers.

Challenges and mitigation

As we reflect on the fiscal year 2023-24, I am proud to report that our Company continued to thrive through innovation and strategic growth, yet not without encountering significant challenges. This year, we faced notable hurdles, including occasional manpower shortages, particularly during festive seasons, and issues related to accumulated stocks of standard and commercial-grade finished goods.

To address these challenges, we have taken decisive measures. Recognizing the impact of manpower shortages, we have revised our agreements with manpower contractors to include penalty clauses for shortfalls and have engaged a new contractor to ensure more reliable staffing. Additionally, we are working diligently to establish strong tie-ups with our main raw material suppliers. This initiative will not only help us manage raw material prices more effectively but also ensure a steady supply.

We are also undertaking the construction of a new shed designed specifically for the storage and processing of raw materials. This development will aid in minimizing stock levels and enhance our operational efficiency. Furthermore, we are focused on clearing our accumulated stocks of finished goods. By converting these stocks into liquidity and freeing up valuable space, we will optimize our resources and better position ourselves for future growth.

Despite these challenges, our commitment to innovation and efficiency remains unwavering. As we move forward, we are confident that these strategic adjustments will strengthen our operations and support our continued success.

As we look to the future, I am thrilled to announce that Global Surfaces Ltd, through our wholly owned subsidiary Global Surfaces FZE, has entered into a License Agreement with SQIP, LLC, based at Florida and Veegoo Technology Co. Ltd. based at China. This agreement will provide us access to exclusive patented technology to produce engineered quartz stones that replicate the beauty of natural marble with enhanced colors and patterns. We anticipate that this development will significantly scale up our operations, enabling us to deliver approximately 100,000 slabs - equivalent to 75 lakh square feet - over the next three years. This strategic move is expected to boost our profit margins and strengthen our position in the market by capitalizing on the high-quality and innovative nature of our products.

Upping our ante

Sustainability is not just a component of our strategy—it is the very core of our business philosophy. We firmly believe that a sustainable future is essential for fostering a self-reliant India, and that true prosperity is reflected in inclusive growth. Our commitment to sustainability drives us to deliver lasting value to all our stakeholders.

Our employees are the foundation of our success, serving as a constant source of inspiration and motivation. Their dedication and hard work enable us to continually raise our standards. We value empathy and mutual support as key principles that propel our growth and contribute to our sense of accomplishment and fulfilment.

I want to express my profound gratitude to each stakeholder for their unwavering faith and trust in our vision. We are deeply committed to preserving this trust and will continue to pursue our mission with innovation, clarity, and determination. Our goal is to harness our superior performance to elevate our Company to new heights and shape a promising future.

Thank you for your continued support.