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One of the most principal messages that I would like to convey is that even we experienced one of the most challenging periods in the external environment; we performed creditably in this challenging environment.
Post-Demonetization and post-implementation of GST, the industry, on an overall basis, witnessed a sluggish growth in the last fiscal. Amidst the same, Adhunik Industries Limited has been able to script a success story in the said fiscal year by registering a growth in turnover of 19.59% from RS, 40,735.33 Lakhs in 2016-17 to Rs,48,715.95 Lakhs in 2017-18. At a time when most manufacturers struggled to create demand for their products, your Company registered a healthy growth in Profit After Tax (PAT) of 111.93% from Rs, 229.36 Lakhs in 2016-17 to Rs, 486.09 Lakhs in 2017-18.
In my opinion this performance and counter-slowdown is attributed to many reasons - one of them being superior quality of our products.
It is a sign of deep prospects that despite the infrastructural slowdown in the last couple of years, the country continues to remain one of the most attractive in iron & steel sector opportunities. With a new dawn in the Indian economy, Government of India has also come up with various policy reforms to address the root needs of people. Infrastructure development is one such area taken-up by the Government keeping in mind the future growth of the Indian economy considering that the over-all economy can prosper only if bottom-line needs of the people are taken care of. We are of the view that this initiative will boost construction activity thereby increasing the demand for steel.
India''s urban population is growing at breath-taking speed. This makes it imperative to strike the right balance of urban development alongside the infrastructure growth. Towards this, our country is foreseeing a record allocation of '' 3.96 trillion to infrastructure sector. This will turn the spotlight on reinforced structures like ports, roads, railways and other areas like affordable housing, physical infrastructure thereby providing necessary momentum to the steel sector to meet its growth targets.
Adhunik Industries is attractively placed to capitalize on India''s projected 7.3% GDP growth for 2018-19 through a combination of prudent vertical selection, in-depth knowledge, proven competence, best-in-class assets, transparent governance and spare capacity to grow.
China accounts for half of global steel production. During 2017-18 after the Chinese Government selected to moderate steel production due to various internal reasons at their end, there was adverse impact on demand-supply scenario and prices internationally. But this caused a huge benefit to our country. There was reduction in imports from China thereby giving a huge fillip to the domestic steel makers.
World crude steel production for the 64 countries reporting to the World Steel Association (world steel) was 148.3 million tonnes (Mt) in March 2018, a 4.0% increase compared to March, 2017. China''s crude steel production for March 2018 was 74.0 million tonnes (Mt), an increase of 4.5% compared to March, 2017. India produced 9.2 million tonnes (Mt) of crude steel in March 2018, up by 5.3% from March, 2017. Japan produced 9.1 million tonnes (Mt) of crude steel in March, 2018, an increase of 2.2 % compared to March, 2017.
The Indian steel industry is riding high on the resurgent economy and rising demand for steel. Rapid rise in steel production has resulted in India becoming the 2nd largest producer of crude steel. The 12th five year plan of the government is envisaging an investment of $ 1 trillion in infrastructure that will boost the demand for steel. India has enormous scope and untapped potential to increase steel consumption in almost all sectors, especially in automobiles, engineering industries and infrastructure development. The consumption of steel per capita in India is around 65 kg per year, much lower compared to the global average (235 kg), leaving significant scope for growth. Growing investments in infrastructure, rapid growth in the industrial sector, increase in urban population, and strengthening of rural steel market can raise the country''s per capita steel consumption considerably. India''s GDP growth is likely to move on the higher side in the coming years due to focus by policy makers on compulsory development of infrastructures & other sectors.
The rapidly growing diversity and choices in the market have increased the role of brand leadership which has significant positive correlation with product and service quality. We are deeply committed to strengthen the Adhunik brand further and towards this we have ensured strict quality compliance for each of the products besides developing strong work ethics. We are also taking advertising and on-ground marketing initiatives to enhance the brand''s recognition and popularity among the target customers. This approach has helped us enormously to achieve our set goals. We have built strong distribution network of more than 192 dealers and distributors and we are also empanelled with various Government Departments such as RDSO-Indian Railways, Delhi Metro Rail, Manipur Police Housing Corporation (Manipur), North Eastern Electric Power Corporation Limited (NEEPCO), Public Health Engineering (West Bengal) etc.. We have planned to prudently utilize every resource in the new financial year so as to achieve the set targets and create new demands in the market.
Our Driving Force
The belief that ''great people create great organizations'' is the philosophy of the Company''s approach to its people. We continued to make significant investments for training in the areas of marketing excellence, customer service and building capabilities for organized retail trade. Human Resources always have been, and shall continue to be, central to the growth of our Company. We are continuously making efforts in the development of Human Resource through a series of employee-friendly measures aimed at talent acquisition, development, motivation and retention. Our endeavour is to develop a culture where a sense of belongingness and ownership of work are the key motivating factors and provide world class training to create a world-class work force.
Expectations and Prospects
India is expected to report steady growth over the foreseeable future. This growth will be manifested in rising disposable incomes, post-GST stabilization and increased aspirations. Given this context, I am pleased to state that Adhunik Industries is the right company in the right verticals at the right time. My optimism stems from the fact that we have created a strong foundation and a rich repository of sectorial experience.
We will continue to focus on enhancing efficiency, optimizing costs and increasing liquidity and preparing for the big leap when the sector rebounds. We are optimistic that this will translate into superior margins, returns on capital employed and market capitalization, enhancing value in the hands of all those who own shares in our company.
With warm regards,
Mahesh Kumar Agarwal
Chairman 28th May, 2018