With immense pleasure I present to you our Company's 30th Annual report. This report
encapsulates the performance of our Company throughout the fiscal year 2022-2023. A year
that brought both challenges and opportunities, and a year that truly tested our
resilience and determination.
In a dynamic and ever-evolving business landscape, we navigated through various
challenges that impacted our industry. From geopolitical tensions to rising energy costs,
inflationary pressures, and disruptions in global supply chains, we encountered numerous
obstacles. Despite these hurdles, I am proud to announce that our company emerged stronger
and more resilient. The past fiscal year demanded solid commitment and a steadfast
approach. Our team exhibited unparalleled dedication, enabling us not only to weather the
storm but also to thrive amidst challenges.
When evaluating the performance of fiscal year 2022-2023, it is crucial to consider it
in the context of the preceding fiscal year, 20212022. The latter period witnessed
substantial revenue growth due to unique circumstances following the aftermath of COVID-19
restrictions. This growth resulted from increased sales volume due to pent up demand from
the market and precautionary stockpiling by buyers The subsequent stabilisation coupled
with escalating energy costs in the global market, notably in Europe, led to a slowdown in
sales and destocking of inventory in the global textile market.
In this fiscal year, our Company experienced a 10% decrease in revenue, totalling INR
387 Crore, owing to lower realisation on the back of correction in key raw material
prices. The EBITDA margin also contracted from 21% to 17%, mainly due to high-cost
inventory affecting our profitability. Despite the aforementioned challenges, it's
noteworthy that our company managed to deliver industry leading margins. Our company
remains committed to deliver operating margins exceeding 20%, driven by higher share of
value added products, which currently stands at 50%. Our financial resilience is evident
in our prudent approach to capital allocation. In the past year, our debt-to-equity ratio
decreased to 0.24 from 0.31 in FY21-22. As a net cash company, we are dedicated to
achieving the status of a gross debt- free entity in the years to come. Moreover, our
Company has achieved a remarkable feat by maintaining a 100% customer retention rate, and
even successfully acquiring new customers throughout the year. This impressive
accomplishment can be largely attributed to our company's strong dedication to a
customercentric philosophy, which has enabled us to build strong relationships and ensure
satisfaction among our clientele.
Our Company executed its expansion strategy within the existing facility, enhancing
high tenancy yarn capacity. Noteworthy advancements include increasing Nylon 66 capacity
from 1 TPD to 3 tPd and Nylon 6 capacity from 3 TPD to 8 TPD. A total of INR 57 Crore was
strategically invested in capacity expansion and plant modernisation. These strategic
investments in high-demand product categories are anticipated to increase sales volumes,
realisations, and margins, consequently driving revenue to surpass INR 600 Crore in peak
utilisation. These product categories, in high demand and requiring reliable supply
chains, feature our Company as a trusted brand in this field. We anticipate minimal or
negligible gestation period between the commissioning of these expanded capacities and
their attainment of rated capacity utilisation. Notably, the funding for these strategic
investments will be derived from internal accruals. We anticipate this approach will
facilitate favorable margins, thereby rendering the investment proposition quite
appealing. This cyclical process is envisioned to establish a sustainable and perpetuating
cycle of value generation for our Company.
Our outlook for the future is characterised by a strong sense of optimism, bolstered by
the ongoing encouraging trends in our product inquiries. Even though buyers preferred
purchasing product volumes in line with demand quantities rather than stockpiling, our
Company has seen continued interest in its products throughout the year. The support from
our customers has boosted our confidence, especially as we look ahead to a strong recovery
in the latter part of FY24. It's worth noting that both our domestic and export markets
are experiencing favorable traction, indicating a rising demand for our products. We are
also committed to enhancing our brand visibility through active participation in various
events and exhibitions. These efforts aim to increase awareness and recognition of our
products in the broader market. A significant focus is on the changing trends in the
Indian market. We have strategically realigned our focus to adapt to these shifts, which
is expected to open up substantial growth opportunities within the domestic market. This
strategic shift is poised to act as a catalyst for our overall growth trajectory. As we
look forward, optimism courses through our veins. The challenges we have overcome have not
only fortified us but also illuminated the path forward. Our commitment to excellence,
combined with our ability to adapt swiftly, will continue to be our guiding stars. Our
focus remains firmly fixed on seizing emerging opportunities, harnessing technological
advancements, and aligning with sustainable practices.
I would like to extend my heartfelt gratitude to our stakeholders i.e. our valued
investors, loyal customers, dedicated employees, and supportive partners. Your consistent
trust in our vision and mission has been the cornerstone ofour achievements. This journey
wouldn't have been possible without your continuous support. Thank you for being an
integral part of our success. I eagerly anticipate another year of collaboration, growth,
and accomplishments together.
- KRISHNA JHUNJHUNWALA
Chairman & Managing Director