Baba N. Kalyani Chairman
"We are committed to do our bit to make India a "Viksit
Bharat"
Dear Stakeholders,
It is a pleasure & privilege to present the 51st Kalyani
Steels Annual Report for FY 2024.1 hope this letter finds you and your families well and
safe.
The macro-economic conditions at the global level continue to be
volatile primarily dominated by intermittent geopolitical tensions. Amid such uncertainty
global GDP grew by about 3.2% in
2023 coming down from 3.4% in 2022. Looking ahead, global growth is
poised at 3.2% in both
2024 & 2025 mainly on account of tightened monetary policies,
reduced fiscal support and low demand amid weaker consumer sentiments.
India makes a mark through its resilience
performance
Indian economy, on the other hand, emerged as the fastest growing large
economy for consecutive two years at an estimated growth rate of 7.8% in FY 2024. With
political stability, Indian economy is estimated to grow at 6-7% in FY 2025 primarily led
by private consumption, strong rebound in fixed capital formation & government
consumption along with large demographic dividend creating strong inhouse demand,
continuously improving exports & manufacturing activities not only in raw material
space but also in value added products.
India's improved outlook can be attributed to the government's pursuit
of becoming self-reliant in manufacturing, minerals and resources among others. The
pandemic & geopolitical tensions forced major economies to reassess their supply chain
strategies globally. To diversify their supply chains, companies and countries are seeking
to create alternate arrangements beyond China to other destinations. Amidst this, India
finds itself in an advantageous position, particularly in creating a resilient supply
chain and indigenous manufacturing.
Stronger output for Indian Steel industry
Global crude steel production stood at 1,889 Million Tonnes in CY 2023.
In the past year, the global steel industry had experienced significant adjustments,
particularly in response to changing demand dynamics, notably in China on account of
production cuts from major steel producers.
Indian steel industry remained the bright spot in global steel industry
performance in FY 2024. Strong growth in infrastructure projects, capacity additions and
rising manufacturing activities helped steel output to grow by 12.5% to reach 140.7
Million Tonnes in FY 2024. With government capital expenditure outlay expected to continue
further, India's steel industry may witness continued growth momentum in the medium term.
Expanding Horizons
With a legacy spanning over five decades, Kalyani Steels has
established itself as one of the most premier brands in the alloy steels sector. To
perpetuate this legacy and to fuel our customers' growth ambitions, we have taken a step
forward with inking an MoU with Odisha government to explore setting up an ambitious
greenfield Integrated Steel Plant [ISP] of annual capacity of
0.7 MTPA. Considering growing importance of low carbon emission steel,
we shall have necessary technological advancements to be able to produce green steel. This
endeavour will be meticulously managed from inception and is engineered to cater to the
evolving industrial landscape.
Indian Automotive industry growth has just started
In FY 2024, Passenger Vehicles [PV] sales reached at its all-time high
at 4.89 Million Vehicles registering a phenomenal growth of ~9%. Commercial Vehicles [CV]
sales remained at a similar level to that of previous year at 1 Million Vehicles. Except
PV all other types of vehicles are yet to catch up to the pre-covid level.
Flowever, it is estimated that in next 25 years, we will observe a
staggering 6X growth in Automotive vehicles units from current level of 4-5 Million units
to 25-30 Million units by 2047.
The robust performance & demand of Automotive industry against
severe challenges such as of increased cost of ownership, high inflation, stricter
emissions norms is one of the major growth drivers for Indian Steel industry.
Government led infrastructure spend to further fuel
the steel industry demand Government of India, in its interim budget for FY 2024-25
announced total capital expenditure outlay ofRs 11.11 Lac Crore; 11.1% higher than the
previous year. Such increased spending clearly signals government's impetus on using
infrastructure led development in the country as major catalyst of economic growth.
Phenomenal performance amid volatility
At the operational level, despite facing a challenging environment
characterized by supply chain concerns and volatility in key raw material prices, Kalyani
Steels navigated smoothly through FY 2023-24. Through effective management of price
volatility, cost reduction initiatives and a focus on quality improvement, coupled with
unparalleled operational efficiency, we sustained our profitability and continued our
successful journey. We achieved ever highest Total Income ofRs 20,063 Million as againstRs
19,558 Million in FY 2023. We recorded our ever highest PBT at Rs 3,327 Million as
compared to Rs 2,251 Million in FY 2023, showcasing a staggering 48% Y-o-Y increase.
I would like to present these numbers as a testament to Kalyani Steels
long lasting promise of value creation for its shareholders. This success would not have
been possible without entire Kalyani Steels team's swift responses in managing overall
operations, overcoming severe challenges and showcasing thought leadership and taking
decisive & appropriate actions whenever required.
Let me conclude by acknowledging the unwavering support of our
stakeholders. Their continued belief in us has been instrumental in our ability to weather
uncertain business environments. I would like to take this opportunity to express my
sincere gratitude to our shareholders, bankers, employees, suppliers and customers for
their co-operation & trust they've always placed on our company and I'm sure we shall
get their continued support as always.
Baba N. Kalyani Chairman