"your company countered challenges with speed and effectiveness." this helped
us counter circumstances beyond our control leading to stable Business outcomes."
OverView
During the year FY 23-24, the Company stood at an inflection point of climbing into the
next orbit. The Company undertook multiple initiatives during this period and these
initiatives are likely to have a collectively positive outcome in a stronger company.
The textile sector experienced a prolonged crisis during the last financial year due to
significant inventory liquidation by major players, which led to a sharp decline
in demand and realisations. The result was that a number of textile sector players
reported a sharp decline in their revenues, margins and profits during the year under
review. The sectorial sentiment continued to be hesitant until the year-end and it is
quite possible that demand may begin to revive only by the later part of the current
financial year.
Your company reported revenues of H19,671 lakhs, EBITDA of H5,735 lakhs and a profit
after tax of H3001 lakhs.
Our performance
It is against this context that one must explain the performance of our company in FY
23-24. Your company reported revenues of H19,671 lakhs, EBITDA of H5735 lakhs and a profit
after tax of H3001 lakhs. This compared favourably with the performance of the Company
during the previous year, which was virtually around the same level. The capacity of the
Company to sustain earnings in a challenging environment must be seen as a validation of
the Company's business model.
Business model
The ongoing slowdown in textile sector warranted a complete re- understanding of the
conventional textile sector.
The conventional space focused on the manufacture of products influenced by commodity
price swings; the niche business warranted a focus on value- addition.
The conventional space focused on the manufacture of standardised products; the niche
business warranted that we customise products in line with demanding preferences.
The conventional space focused on extracting economies largely related to scale; the
niche business warranted that we enhance or protect margins through superior aesthetics.
The conventional space focused on matching prevailing realisations;
the niche business focused on generating a financial return in line with enhanced
product positioning cum perception.
The relative success and outperformance of the Company during the last financial year
was the result of our company having remained consistently faithful to these principles. I
am pleased to communicate that our longstanding buyers continued to buy from us; some
customers increased purchases; some graduated to more expensive fabric. The result was
that even as the broad textile sector remained tentative, our business remained largely
insulated.
Addressing the challenges
It would appear from my explanation that our business environment remained relatively
smooth during the last financial year.
I must indicate that this was not so.
The segment of the textile sector that we are present in continued to be marked by a
number of variables. I would venture to suggest that the textile sector is perhaps one of
the most vulnerable to changes in the
global operating environment; each time, as the saying goes, the world catches a cold,
the textile sector is one of the first to sneeze.
In our business, the challenges are accentuated by an order-to- delivery-to-use cycle
comprising nearly three seasons. This means that what is manufactured today will be
delivered and used downstream only a year down the road. This makes it imperative to plan
for all variables that could transpire in the interim, putting a premium on planning and
preparedness.
During the year under review, We had one of the major aspiration to scale up our
business, in the attempt of doing so, we faced multiple quality issues at our factory
operations.
Your Company countered this through a hands-on engagement - from the top management of
the Company through to everyone in the hierarchy - to ensure that emerging challenges were
addressed with speed and effectiveness. This prevented circumstances beyond the Company's
control translating into adverse Balance Sheet outcomes.
Future focus: Bringing out the best
The Company has its agenda charted for the current year and beyond.
One, the Company will seek to sweat its weaving cum processing units more through
enhanced orders. The higher the capacity utilisation, the stronger the amortisation of
fixed costs, strengthening overall profitability.
Two, the Company will seek to enter premium supply chains addressing men's Indian
wear, an area marked by the need for enhanced creativity and the customer's capacity to
correspondingly remunerate.
Three, the Company will start planning the next investment phase when its capacity
utilisation touches 85% in the next financial year.
Four, the Company will enhance visibility among international apparel giants
entering India and seeking dependable quality-driven partners.
Five, the Company will continu? to focus on hiring smart and better from top-notch
institutions with the commitment to deepen its quality- first service culture.
Six, the Company will deepen the effectiveness of global marketing offices (Dubai,
New York, New Delhi, Columbia and Los Angeles) with the objective to deepen customer
proximity and carve a larger share of their spending.
"At Orbit Exports, we
resolved to create a company that was relatively independent of market cycles,
generating a reasonable surplus down sectorial downtrends and reporting handsome profits
during periods of recovery. This strategy clearly was influenced by the kind of company we
needed to be"
Seven, the Company will sustain the development of new fabric designs, widen its
swatch, approach customers with larger collections and deepen its recall as a vendor with
a design-intensive personality.
Eight, the Company will deepen its social responsibility - whether in the form of
an increased use of recycled polyester or organic cotton in its resource mix, increasing
the proportion of renewable energy in its energy mix from 40% to 75%, enhancing the use of
recycled water in its manufacturing facilities and sustaining its mid-day meal support for
marginalised students. In doing so, the Company will remain committed to growth with a
conscience.
Optimism
Your Company always had and will continue to have an optimistic approach towards all
its stakeholders. We firmly believe that challenging times are nothing but great teachers
and encountering challenges brings out our creative edges. Be it a changing market
outlook, evolving trends, deepening compliances, altering geo-political
situations, etc, we will continue to serve with the same enthusiasm.
Our full-fledged in-house design team has enabled us to create innovative designs /
qualities, which are now better delivered through our process house. This has resulted in
a better servicing of our customer demands. As an outcome, we are able to attract
prominent national and international fashion brands coupled with an increased wallet share
of our existing customers.
I cannot conclude without expressing my deep gratitude to all our shareholders,
customer and employees, who have extended their unwavering support.
In view of these realities, I hold the vision of taking the Company into a higher orbit
leading to a sustained growth for all our stakeholders.
| Pankaj Seth |
| Managing Director |