ws. :
It gives me great pleasure to present Savita's Annual Report and overall performance
for the fiscal year 2023-24.
Over the financial year under review, your Company delivered a steady performance with
YoY growth in Total Revenues, reaching ' 3,815 Crore, largely driven by an improved
product mix.
Challenges such as the ongoing geo-political crisis in Eastern Europe led to sharp
volatility in crude oil prices, impacting your Company's entire value chain. Additionally,
your Company witnessed an increase in base oil prices, the key raw material for most of
its products. Rising raw material prices and other costs resulted in a lower EBITDA and
PAT at ' 328 Crore and ' 204 Crore, respectively, compared to the previous
year. However, your Company witnessed an overall volume growth of 8% despite the Red Sea
crisis increasing export freight costs and impacting export volumes.
Division-wise, your Company witnessed steady growth across its Lubricants and
Transformer Oil Divisions while, White & Mineral Oil segment faced some headwinds.
Your Company's strategic focus on harnessing its R&D capabilities for
premiumisation of its current product range, leveraging innovation to introduce new
products, proactive management and
market insight helped ensure stability amid uncertainties in FY 2023-24.
Your Company has been deeply committed to sustainability since its investment in
renewable wind energy over two decades ago. In 2017, your Company became the first Company
in India to produce a 100% bio-based, fully biodegradable transformer fluid manufactured
from vegetable oils and renewable materials.
As part of your Company's strategic priorities for the fiscal year, your Company is
proud to announce the commissioning of its new synthetic Ester manufacturing plant in
October, 2023, making it the first Company Globally to manufacture and market all three
categories of
insulating fluids for transformers: mineral based, natural ester based and synthetic
ester based fluids. With the diverse applications of these esters and considerable growth
in the number of use cases, your Company aims to leverage its existing customer
relationships for cross-selling while also pursuing new customers across all our product
platforms including Power Fluids, Cosmetics, Process Fluids, Automotive and Industrial
Lubricants.
Moreover, your Company launched the path breaking SAVSOL Ester5 fluid technology in FY
2023-24, a quantum leap in lubricant technology for the personal mobility segment in
India. As the first Indian lubricant company to establish its own Ester manufacturing
plant, this innovation propels your Company's product range to the next level in terms of
performance. Esters were traditionally reserved for highly sensitive applications due to
their pricing. Your Company aims to bring down the cost of this technology, making its
benefits accessible to regular consumers while simultaneously reducing the carbon
footprint of your Company's lubricant range. Through these products, your Company hopes to
unlock significant growth potential for its lubricant division.
To further strengthen its brand recall for the newly launched SAVSOL Ester5 range of
lubricants, your Company is excited to welcome superstar Sidharth Malhotra as its Brand
Ambassador. Sidharth is an icon who represents the young energy of India, challenging the
status quo, which is synonymous with what your Company aims to achieve with its homegrown
SAVSOL Ester5 brand.
Your Company is also actively developing products for the future, including a concept
called immersion cooling, applicable across three major sectors - Electric Vehicles and
Chargers, Energy Storage Systems and Data Centres.
GLOBAL AND INDIAN OUTLOOK
In FY 2023-24, the global economy showcased resilience achieving modest growth of 3.2%
despite challenging conditions. Factors such as rising geopolitical concerns, inflationary
pressures, rise in interest rates and volatile energy and food market conditions tempered
global growth. Furthermore, the Red Sea crisis resulted in higher logistical costs and
shipment delays, impacting global supply chains.
Withstanding uncertainties, India maintained its steady growth momentum, registering an
impressive 8.2% real GDP growth in FY 2023-24, up from 7% achieved in the previous year,
reinforcing its status as the fifth-largest
global economy. Key drivers of this growth included robust domestic demand, rising
investments, increased industry activity, moderate inflation and stable interest rates.
Additionally, rising disposable incomes, favourable demographics, the China Plus One
strategy and favourable government initiatives such as Make in India 2.0 and the PLI
scheme position India as a potential global manufacturing hub.
The growth across the Indian transformer segment was mainly driven by economic growth,
a rise in energy demand, industrialisation, urbanisation, improved electrification and a
shift towards renewable energy, supported by government initiatives such as ' 1.11
Lakh Crore increased capital outlay in the Budget 2024-25 for infrastructure development
in FY 2024-25. The lubricants segment continued to thrive, propelled by strong growth in
the automotive sector, increased industries activity and favourable government policies
boosting domestic manufacturing and exports.
CONCLUSION
With the Indian economy expected to continue its growth trajectory in 2024-25, your
Company is optimistic about unlocking the various macro and industry opportunities.
In conclusion, I extend my heartfelt gratitude to all stakeholders for their unstinted
support throughout this journey. Upholding your Company's tradition of delivering
consistent value, your Board has recommended a final dividend of 200%, amounting to '
4 per equity share of ' 2 each during FY 2023-24. Your Company's Board approved in
its meeting held on 3rd August, 2024, buy-back of up to 5,40,000 equity shares
@ ' 675/- per share amounting to an outgo of ' 36.45 crore (excluding
transaction costs and tax) and this offer is currently under implementation.
I would also like to express my sincere gratitude to our employees, customers, partners
and all other stakeholders for their continued support and trust in our capabilities to
deliver value-driven growth.
Leveraging our groundbreaking innovations, we remain committed to delivering
exceptional value to our stakeholders in the years ahead.
| Warm regards, |
| Gautam N. Mehra |
| Chairman and Managing Director |