I am pleased to present the Annual Report for the financial year
2023-24, marked by resilience and adaptability amidst a dynamic global landscape.
Dear Shareholders,
Year Under Review
The fiscal year 2023-24 presented a unique economic backdrop. The
global economy defied expectations in potentially history-making ways. Amid disturbing
conditions—wars, surging inflation, and the biggest interest-rate surge in 40 years -
the global economy did not suffer a significant downturn. It merely slowed. This was an
unfamiliar plotline: It implies the world economy has grown more resilient in ways we
might not yet fully understand.
While developed economies faced inflationary headwinds, proactive and
progressive steps allowed these nations to overcome the overhang. The US and other
advanced economies demonstrated considerable resilience, particularly during a strong
holiday season.
Towards the close of 2023, global logistics issues posed significant
hurdles for international trade and commerce. However, timely intervention ensured that
the challenge was short-lived.
Indo Count is delighted to report a successful year, where we
effectively navigated the complex environment, reinforcing and improving our position in
the market.
I am pleased to share that we have surpassed our volume guidance for
fiscal year 2024, achieving sales of 96.80 million metres. Our total income surged by
18.33%, scaling from C3,043 crore in FY23 to C3,601 crore in FY24.
Despite the inflationary headwinds across the world and India, we
improved business profits and profitability. Our EBITDA increased from C486 crore in FY23
to C603 crore in FY 24, and our EBITDA margin stood at 16.7%. We reported a Profit after
Tax of C338 crore.
Your Company is highly rated by CAREEDGE (AA-) and ICRA (AA-),
reflecting our robust financial health and credibility.
The strategic focus on moving towards value-added products through
brands and distribution, leveraging capital allocation, optimising operations and
providing overall better solutions to end customers has been instrumental in driving our
growth.
Mindful of the need to reward shareholders, the Board has recommended a
final dividend of C2.20 per equity share of C2 each, which is 110%.
Our progress in the face of volatility highlights your Company's
maturation resilience. It positions us for enhanced business competitiveness in the coming
years.
AWARDS & RECOGNITION
While our journey through the maze of diverse challenges was tiring,
our energy was boosted by the number of rewards that stood out as a testament to our
commitment to business excellence.
We were honoured with the prestigious Niryat Shree Gold Trophy, awarded
by FIEO, for our exceptional performance in exporting goods and services.
Indo Count Foundation was recognised as the 2nd Runner Up in the Best
CSR in Healthcare category at the ASSOCHAM
Healthcare Summit and Awards 2023. The award highlights our unwavering
dedication to providing quality healthcare to the local communities.
Our brand, Boutique Living, was awarded the title of E-Retail Brand of
the Year 2023 at the ET Retail E-commerce and Digital Natives Award 2023, acknowledging
our prowess in the digital retail landscape.
We were honoured with the prestigious Business World Sustainable World
Awards 2023 for being recognised as India's most water-efficient organisation. This
recognition underscores our relentless efforts to enhance water utilisation efficiency and
implement robust wastewater management practices, including recycling, recovering, and
reusing industrial effluents. We take immense pride in our disciplined efforts to
sustainable practices.
As the spotlight shone bright on Indo Count for various reasons, we
remain humbled and committed to making a stronger difference to our customers and
communities.
CAPEX & GROWTH PLANS
Over the past two years, we have strategically allocated capital
towards value-added businesses, positioning ourselves for substantial growth
opportunities. Our investments in fashion utility and institutional bedding have met with
significant market acceptance, reflecting positively on our brand.
We completed the last leg of our capital investment plant during the
year. Our contemporary spindle fleet (~68,000 spindles) with cutting-edge technology
commenced operations in FY24.
In the month of April, we Acquired the Wamsutta brand, a leading
national brand in the US. It has a long history in the textile industry and is known as a
National Brand in North America. The brand's Product line encompasses various
categories, including bedding, bath linens, window treatments and decorative accessories.
Wamsutta's collections are designed to a variety of tastes and interior styles.
Overall, the brand epitomises luxury, comfort and timeless elegance in
the realm of home textiles, catering to customers who appreciate the finer things in life
and seek to elevate their living spaces with premium quality essentials. It will have a
material impact on developing our branded business as we advance.
STRENGTHENING OUR CAPABILITY
We have completed establishing our spinning and fashion bedding units,
along with brownfield expansion and acquisitions, representing an investment of nearly
H1,000 crores. Moving forward, our focus will be on maximising the efficiency of these
assets to optimise costs and enhance operational effectiveness, ensuring sustainable
financing for our continued growth trajectory.
With our capital expenditure aligned and synergy creation achieved, our
attention now turns to proactive measures in sustainability and strategic IT initiatives
for process enhancement. Our diverse product portfolio, spanning multiple geographies, has
enabled us to navigate challenges and maintain consistent growth.
In line with our commitment to digital transformation, we have
partnered with Accenture to standardise, optimise, and re-engineer key business processes,
including manufacturing, supply chain, logistics, and procurement. This collaboration
promotes a culture of agility and innovation, ultimately aiming to serve customers and
stakeholders better. This significant step positions us to elevate customer service and
amplify the value proposition of our business. The seamless integration of our facilities
strengthens our competitive edge and efficiency to meet growing demand.
BRAND, MARKETING AND TECHNOLOGY
Our Company is built on core strengths: innovation, quality, and
service. Our customer-centric approach guides our product development and shapes our
marketing strategies.
We have diligently established distribution channels in key markets
such as the US, UK, and Dubai. We plan to expand into new markets as opportunities
consequent to Free Trade Agreements (FTAs) unfold.
We are relentlessly focused on developing innovative ways to promote
our products and enhance our creative process to achieve market share growth. Our
commitment to continuous improvement ensures that we strengthen our competitive advantage.
Our overall marketing strategy centres on building a presence in new
markets and acquiring new customers. With our comprehensive bedding solution product range
and a focus on delivering exceptional value, we are confident in offering a compelling
proposition.
Our license brand Jasper Conran gained significant traction in FY24 and
registered an encouraging performance. Our other product brands, like Infinity, Signature
Sateen, and Pure Earth also performed precisely well.
Also, we successfully launched Gaiam, a fitness brand, receiving
positive feedback and promising traction. We are confident that our license brand will
continue to thrive in the future.
Additionally, we secured licensing agreements for Fieldcrest and
Waverly, which are prominent US national brands. These additions will solidify our
presence in North America as the leading home textile player.
As we advance, we will sharpen our focus on creating customised
marketing strategies around our brands to transform prospects into performance and
profits.
MACRO ECONOMY
Global: The world is currently a complex chessboard. Many economies are
on the edge of recession due to rising inflation and interest rates. Yet, amidst these
challenges, there's a shift in the balance of power. Established economies are no longer
the only ones calling the shots, with emerging economies like India stepping onto the
world stage. India's strategic importance as a large Asian democracy makes it an important
partner for countries seeking to counterbalance China's influence.
The US: The US in 2023 surprised many. The economy grew despite
recession fears, but inflation lingered. The US consumer market is a complex picture.
Despite its overall size and wealth, inflation and a growing preference for online
shopping have influenced people's spending trends. While those with higher incomes
felt comfortable spending (comforted by gains from a strong stock market), value-conscious
shopping and budget-watching became more conscious of spending owing to rising costs.
Despite the mixed attitude of the consumers, we witnessed decent demand for our products.
Overall, we are optimistic about the US market in the coming years.
India: India today stands tall as the world's fifth-largest economy,
racing to become the third largest in the next 2-3 years. This is a testament to the
vibrancy and potential of our nation. Our young, talented population is a driving force
with a robust IT sector, a booming services industry, a steadfast focus on infrastructure
creation and a resurgent manufacturing base. These factors create immense opportunities
for business enterprises.
The Indian consumer market is burgeoning with prospects. India's
consumer market represents a long-term structural opportunity driven by population, a
growing middle class, rapid urbanisation, increasing disposable incomes and rising
aspirations. These realities herald significant growth prospects for consumer-facing
businesses.
HOME TEXTILE INDUSTRY
Global: The global home textile sector will grow by more than 5% for
the next decade (2024-33), fuelled by rising homeownership rates globally, coupled with an
increase in renovation and redecoration activities. The proliferation of e-commerce
platforms will also make a significant contribution to expanding the home textile market.
The US: The US home textiles market size is estimated to grow by USD
6.31 billion between 2023 and 2028. This growth will be propelled by increased consumer
spending on household decor and furnishing, highlighting a growing interest in home
improvement. A rising demand for eco-friendly home textile products reflects a broader
shift towards sustainable living.
India: The home textiles market in India is growing with leaps and
bounds, supported by growing household income, increasing population, rising income
levels, increased organised retail, and growth of end-use sectors like housing,
hospitality, and healthcare. Favourable domestic cotton prices, juxtaposed with
international rates, have strengthened India's competitiveness on the global stage.
Additionally, export opportunities should abound with global companies rethinking their
supply chains and diversifying production.
The home textile industry in India finds itself at a pivotal moment,
embracing opportunities at home and from across the globe.
As we navigate the complexities of global trade, Indo Count is poised
to capitalise on emerging opportunities. Our manufacturing excellence and large and
growing global presence, alongside our concerted efforts to optimise India's entire value
chain and reinforce our commitment to responsible raw material sourcing, positions us
favourably in the market.
SUSTAINABILITY
The climate change challenge is a topic that is much discussed and
debated worldwide. Increasingly, corporate leaders, consumers, financiers, and politicians
are demanding that steps be taken toward environmental sustainability.
Such calls for going green have been short-lived in the past. But this
time around, they seem to be gaining momentum. Cognizant of this trend, Indian corporates
are fast embedding the sustainability agenda as part of the organisation's metrics
and core values.
Sustainability is a core focus of Indo Count. It is rooted across our
operational value chain – from sourcing to packing and beyond. During the year under
review, we have taken definitive steps that showcase our undaunted commitment to reducing
our carbon footprint.
We have invested approximately H50 crores in a 10-megawatt solar power
generation project in Gujarat, making our Bhilad plant run on 90% green energy.
I am extremely proud to announce that Indo Count debuted in the Dow
Jones Sustainability Index (DJSI) for 2022, achieving a score of 42. This is a significant
milestone that highlights our strong commitment to ESG principles.
We look forward to continuing our sustainability journey, where every
step is a stride towards a better and more responsible future.
SOCIAL RESPONSIBILITY
We believe an island of prosperity cannot be sustained in a matrix of
misery. Every enterprise must uplift underprivileged communities around its
establishments.
At Indo Count, we endeavour to create a positive and lasting impact on
needy communities through social initiatives. Our growing operations have created
employment opportunities and nurtured the growth of the MSME sector in our hinterland. We
have invested in our people's development through various skill-building initiatives.
We have also empowered women by striving to increase their representation across all our
operations.
Additionally, we have continuously widened our CSR coverage in terms of
interventions and fellow citizens positively impacted. Our focus areas include health,
education, environmental responsibility, and access to clean water and sanitation.
PEOPLE INITIATIVES AND VALUES
We prioritise fostering a culture built on strong core values. This
foundation allows us to empower our workforce by providing them opportunities to develop
their skills and take on greater responsibilities. Our dedicated HR team offers a
comprehensive range of training programs, ensuring our employees are equipped to address
the evolving needs of our society and remain highly skilled and responsible contributors.
OUTLOOK
Positive external conditions and our inherent strengths in products and
personnel position us for significant growth in the coming years.
We aim to increase the share of value-added products in our revenue
pie, strengthening the overall quality of business and delivering enhanced value to our
stakeholders. Further, we will cement our presence in existing geographies while working
to establish our presence in new high-growth markets.
Looking to the long term, we are committed to optimising asset
utilisation to propel the Company to the next level.
ACKNOWLEDGEMENT
I sincerely thank all our stakeholders for their unwavering support and
trust in Indo Count. Our success is a result of the collective efforts of our dedicated
team, our customers' trust, our partners' commitment, and our shareholders' faith.
Together, we strive to uphold our commitment to excellence, sustainability, and innovation
in the textile industry.
Warm regards
Anil Kumar Jain