DEAR SHAEHOLDRES,
It's a happy time to connect with you. Once again, we scaled new
heights as we clocked a record-breaking performance for a second year in succession.
Moreover, we have strengthened our growth levers appreciably, which should help us sustain
our performance and remain committed to creating stakeholder value.
"In last few years, we had excellent business momentum and are
well-positioned in the marketplace. With our differentiated capabilities, our large
investments and our disciplined business management, I am confident that we will
continue to increase our market share and deliver value for all our stakeholders."
Business performance
Our topline and bottomline were at historic highs crossing C4,400 crore
and C500 crore, respectively. Moreover, our operating margins improved by about 126 bps
despite the elevated and persisting inflationary headwinds. Our overall growth was
particularly encouraging.
Stable steel prices for a large part of the financial year resulted in
a revival of stalled projects leading to robust demand from all sectors, especially from
refineries, process industries and the core sector. Also, there was considerable traction
for Carbon Steel and Stainless Steel products from across the globe.
The kind of growth we registered, we feel, was quite exceptional.
Because it was the outcome of multiple factors - projects kickstarted, demand resurfaced,
and new capacity came in simultaneously, which allowed us to capitalise on growth
opportunities seamlessly. The perfect culmination of the right positive forces at the
right time is quite a rarity in general and in these days in particular.
As our operations increased, we enjoyed the advantage of economies of
scale.
Moreover, our sales mix tilted in favour of value-added products. Case
in point: in carbon steel, major orders were related to the oil and gas sector, where
margins are typically better. Everything worked in favour of better margins.
We have continued with our strategy to invest in more specialised
products and improve efficiencies, focusing on technology and infrastructure. Our
well-calculated and judicious capital allocation in capex and all investments have
resulted in a solid Balance Sheet and would help us leap to the next level.
Landmark for the year
In the Financial Year 2021-22, we had received largest ever order of
C700 crores and this year, we raised our benchmark and received our single largest ever
order worth C801 crores for supplying Carbon Steel Coated Pipes from one of the biggest
EPC Contractor for their order from Public Health Engineering Department, Jodhpur,
Rajasthan.
To cater to this order, we have established a pipe mill at Kheerva,
Phalodi. These pipes will be deployed to supply water in Jodhpur and nearby villages
across the region under Rajiv Gandhi Lift Canal (Phase III) Project.
Capex plans
At the start of FY23, we announced a capex of around C180 crore for
increasing our stainless steel cold finishing capacities. Further, intending to solidify
our presence in the Eastern part of the country, we announced a capex of roughly C150
crore for a carbon steel pipe manufacturing facility in the eastern part of the country.
After some initial delay due to our Rajasthan facility (which was the
need of the hour), both projects are progressing well. We expect the stainless-steel
expansion of cold finishing to commence operation in the early months of Calendar 2024.
For the carbon steel project, land acquisition and development are well underway. We hope
to commercialise this project in the first half of FY25. The new capacities should help us
shore up volumes and our performance beginning FY25.
Acquisition
We entered into a definitive agreement to acquire a majority stake in
Ravi Technoforge Private Limited (RTL), a Rajkot-based company. We completed the first
tranche of acquiring 53% of the shares at an investment of close to C100 crore as per the
terms of the agreement. This transaction, we are confident, will add a new growth driver
both domestically and globally. We are well positioned to leverage our managerial,
technical and financial capabilities to scale its operations, making it more sustainable
and creating long-term value for the shareholders.
Environment Stewardship
FY23 has been significantly eventful at Ratnamani as we took a decisive
step towards reducing our carbon footprint. We successfully commissioned our 15MW solar
project in March 2023 with an investment of approx. C50 Crores. I feel this is an
important initiative to showcase our continued and long term orientation towards ESG and
sustainability. We have been investing in Green Energy since 2011, and remain deeply
committed to investing in sustainability strategies in the coming years also.
Looking into FY24
We have entered FY24 on a very positive note with a confirmed order
book of approx. C2,600 crore. Barring unforeseen challenges, we expect the topline to grow
in the range of approx. 10% and EBIDTA in line with our past track record.
The demand seems to be good for stainless steel seamless and welded
products across industries and carbon steel pipes for certain specific applications. I am
very optimistic about good demand potential from the water sector because a lot is
happening there.
Exports also appear buoyant, because an increasing number of customers
in the international market is accepting our products.
In last few years, we had excellent business momentum and are
well-positioned in the marketplace. With our differentiated capabilities, our large
investments and our disciplined business management, I am confident that we will continue
to increase our market share and deliver value for all our stakeholders.
Medium-term prospects
The medium term prospects are considerably promising too. India is
ardent about creating world-class infrastructure, reflected in the massive Budgetary
allocation towards the sector for three consecutive years. In addition to accelerating
economic progress, Government capex promises to create exciting growth opportunities for
our Company over the coming years. Aligned with this reality, we are working on several
strategies that are currently on the drawing board and should get crystalized in the
current year.
Acknowledgment
We will work very deliberately to ensure that we continually shape the
Company, strategically choosing growth opportunities and the geographies in which we build
our presence to achieve the optimal con_guration for success.
In closing, I am grateful to the Board for guiding me to execute my
responsibilities in the best possible manner. I thank all the team members for their
relentless efforts in strengthening Ratnamani with each passing year. I would also like to
thank all our stakeholders for the support and assistance provided throughout our journey.
I solicit your continued cooperation.
| Warm regards |
| PRAKASH M. SANGHVI |
| Chairman & Managing Director |