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It is with immense pleasure and pride that I present this Annual Report as Finolex Cables completes 50 years of operations. Our five-decade growth is an inspiring journey of turning challenges into opportunities and setbacks into success. All along the way, despite changing market dynamics, we have remained true to the guiding principles of our Founders: never compromise on quality and create market-leading products. Their vision of excellence has been at the heart of our culture for innovation, expansion and modernisation and will continue to be the North Star for our onward journey. We are also proud of the Finolex way of working - maintaining transparency both within the organisation as well as outside and thereby engendering trust and credibility.
During the year under review, India completed a special milestone when one of the biggest reforms in history came to life with the rollout of the much awaited Goods and Services Tax (GST). While the temporary disruptive nature of the GST, along with the lingering after-effects of demonetisation slowed down GDP growth, finishing at under 7%, India’s long-term prospects remain bright. The Government’s intense focus on stabilising GST as well as other wide-ranging reforms should encourage pick-up in investment and robust consumption to spur growth.
We are pleased to share that your Company successfully navigated the challenges of GST implementation. Total revenue increased to Rs. 3,012 Crores in FY 2018 as against Rs. 2,771 Crores in the previous year, growing by 8.7% on year-on-year basis. In the backdrop of muted growth in the wires and cables industry, our performance demonstrates our business resilience. Profit after Tax (PAT) grew by 13.3% led by our continued focus on cost control and operational efficiencies. Our investment in branding is also rewarding us well as we are able to command better prices, leading to improved profit margins.
Product diversification has long been our strategy to build a stronger and more stable business. Within our cables segment, our product portfolio is all encompassing, serving diverse industrial and domestic requirements. Going beyond cables, a whole gamut of electrical products, including switches, MCBs, lighting products, fans and water heaters is now available from the Finolex stable. We are pushing the reach of our electrical products through our vast distribution network while also building a separate network for every product line. Electrical product portfolio expansion will continue on a steady basis to increase the share of our revenue from this vertical.
By foraying into consumer electrical products, we aim to develop the B2C part of our business. A focussed marketing approach is in place to deepen consumer connect and help realise our ambition.
A convergence strategy of diverse marketing vehicles, including digital marketing, is being leveraged to enhance our brand visibility and reach out to end-consumers. We are also using sports as a marketing medium, specifically cricket, considering the impact it has nationally.
At Finolex Cables, our industry leadership is underpinned by our manufacturing strength. Regular investments towards backward integration, setting up of new plants and expansion at existing facilities have enabled us to generate tremendous value from the market opportunities.
Our emphasis on acquiring critical technologies has also bolstered our ability to produce world-class products. We are putting up a new plant at Goa for manufacturing electrical conduits. Capacity expansion is underway at our plants for solar cables, fibre optics and LAN cables. We are also undertaking backward integration for some more of our products. Our sound financial health further strengthens our ability to fund business expansion from internally generated funds, as and when required.
As India moves resolutely forward to join the league of developed nations, infrastructure development will remain critical to accelerate economic growth. This provides us with considerable opportunities to grow our core business of wires and cables. The Government’s ambitious schemes for improving power availability and accessibility, such as Ujwal DISCOM Assurance Yojana (UDAY) and Integrated Power Development Scheme (IPDS) will boost demand for wires and cables. The 100 Smart Cities Project will also require modern cabling. Additionally, developments in the sectors of telecom and railways and progress on the Digital India mission are expected to provide a growth impetus for your Company. We also see considerable opportunity for our electrical products business as India, with its favourable demographics, continues to be a strong consumption led growth story.
We have been ably supported in our journey by our employees, whose dedication and energy are second to none. I sincerely thank all our employees for their efforts. On a personal note, serving in the capacity of an Executive Chairman for the past five years, it has been a privilege to work with all of you and our senior leadership team.
I am extremely proud of all that we have accomplished together and am honoured to continue in this role for the next term. I will remain fully engaged to drive the Company’s future strategic direction.
My sincere appreciation to our distribution partners, suppliers, customers and our bankers for their continued support; and our valued shareholders for their immense faith in us. We are very confident in the direction of diversification and expansion that we are taking; this makes our Company better and stronger for everyone. As we embark on the next era of our journey, our rich legacy will continue to inspire us to deliver greater value for all our stakeholders.
Mr. D.K. Chhabria