Rajoo Engineers Ltd

Chairman's letter to Shareholders

I am delighted to share with you the annual report of your Company for the fiscal year concluding on March 31, 2024. While the past year posed significant challenges for the industry, I am pleased to note that we have persevered with resilience and flexibility amidst these adversities.

In 2024, the global economy is expected to register slowing growth for the second consecutive year. This is primarily due to the dampening effect of high interest rates in most major economies globally, in addition to weakening growth in China, the world's second largest economy. Yet, this comes after global growth consistently outperformed expectations in 2023, withstanding numerous headwinds, especially ongoing and widening geopolitical tensions such as conflict in Gaza and Israel could escalate further into the wider region, which produces about 35 percent of the world's oil exports and 14 percent of its gas exports. Continued attacks in the Red Sea through which 11 percent of global trade flows and the ongoing war in Ukraine risk generating fresh adverse supply shocks to the global recovery, with spikes in food, energy, and transportation costs. Container shipping costs have already sharply increased, and the situation in the Middle East remains volatile. Further geo-economics fragmentation could also constrain cross-border flow of commodities, causing additional price volatility. More extreme weather shocks, including floods and drought, could, together with the El Nino phenomenon, also cause food price spikes, exacerbate food insecurity, amidst the slowdown. However, the global economy will experience a gradual normalizing of economic conditions following profound disruptions in recent years, particularly in the second half of 2024, with expectations of inflation further easing and monetary policy loosening. This will support a reaccelerating global growth momentum that will further strengthen in 2025. With all these events happening in tandem, we remain cautiously optimistic based on expected gradual recovery in demand from our export markets, which should complement domestic growth. In fact our order inflows continue to be stable with an adequate pending order book.

Throughout our journey, we've cemented our position as a top performer in designing, producing and delivering top-notch plastic extrusion machineries'. Our success stems from a steadfast dedication to innovation, excellence, and exceeding customer expectations. Substantial investments in cutting-edge technology, advanced equipment, shopflooor space and highly-trained personnel underscore our ongoing commitment to leading the industry.

Recently we also successfully completed two notable projects in the sheet extrusion system category, each achieving an impressive output of approximately 800kg/hr. These achievements mark significant milestones for our company and highlight our unwavering commitment to excellence in manufacturing. Our collaboration with industry giants like Cosmo First and Berry Global is a testament to our reputation for reliability and innovation. These partnerships not only showcases our ability to meet the stringent requirements of market leaders but also underscore the trust they place in our expertise and technology.

Our latest milestone in innovation and technology - the enhancement in technology for our existing five-layer blown film line range. This initiative represents a significant leap forward as we prepare to launch India's first-ever High Output Five-layer blown film line. With an impressive output of 800kg/hr and a line speed exceeding 150 meters per minute, this cutting-edge technology sets a new standard in the industry competing with global leaders offering value for money for our customers.

Marking a significant expansion in our operational capacity, we celebrated the inauguration of our new facility on April 16th, 2024.This expansion includes an additional 21,000 square feet dedicated to assembly, that streamlines production processes and enables to meet the growing demand more efficiently. Furthermore, we have established a dedicated 7,000 square feet space for Quality Control, demonstrating our unwavering commitment to elevating quality standards across all aspects of our operations. This investment underscores our dedication to delivering superior products and services, positioning us for sustained growth and customer satisfaction in the ever-evolving market landscape.

I'm pleased to announce that your Company has recently completed a share buyback, in line with our commitment to enhancing shareholder value. We bought back 26,176 equity shares at Rs. 210/- each, reflecting our confidence in the company's financial strength and future outlook. This strategic move aims to potentially increase the earnings per share and boost returns for our shareholders, while also signaling our belief in the company's ability to generate sustainable growth and shareholder value.

I am very happy to share that our Revenues for the year crossed Rs. 197 Cr mark which is a testament to the hard work and dedication of our team and focused efforts on the strategies charted out in FY 23. This is just one step towards our overall growth strategy. This positive momentum underscores the effectiveness of the company's strategic initiatives and highlights its ability to capitalize on emerging opportunities in the market.

Our order book continues to be strong, reflecting the trust and confidence of our customers in our solutions. We are committed to ensuring that these orders are fulfilled promptly and with the highest standards of quality, further solidifying our reputation in the world market.

As we forge ahead, our primary aim is to enact substantial measures aimed at curbing carbon emissions, mitigating waste, and advocating for the adoption of recycled materials. Our unwavering commitment remains steadfast in investing in sustainable technologies and methodologies, thus affirming our dedication to preserving our planet for the well-being of generations to come.

Moving to FY24 financials, I would like to share that our Company achieved net revenue of Rs. 197.35 crore in FY24, as against Rs. 159.79 crore in FY23, representing a YoY increase of 23.51%. on account of intensive efforts by a larger sales team and entry into new territories, coupled with revived demand for sheet extrusion lines and thermoformers.

The EBITDA (excluding Other Income) was at Rs. 26.68 crore in FY24 as against Rs. 14.02 crore in FY23, increase of 90.35% YoY on account of increased in sales, higher capacity utilization and improved operational efficiencies.

The PAT was Rs. 21.01 crore in FY24 compared to Rs. 11.49 crore in FY23, YoY increase of 82.86% Aligned with our strategy, we persist in broadening our international presence, prioritizing market penetration and ongoing investments in research and development to drive advancement. Our ongoing efforts are dedicated to uncovering fresh pathways for growth and maximizing the efficient use of our current resources.

Our success so far has been driven by our most important asset our team! I would like to take this opportunity to thank each member of the Rajoo family. I would also like to thank our Clients, Creditors, Banks, Financial Institutions, and other Stakeholders. Their faith in us and support extended makes it easier for us to strive and excel.

I am optimistic about what we can do next in the years ahead. Recent success has given our group a great platform to build on. I am excited by the heights I know we can reach, not just financially, but also in terms of the difference we can make to communities. We can set new standards in technology, sustainability, and skills development.

Thank you for being a part of our journey, and I look forward to the exciting future that lies ahead.