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The Company generated income of Rs.760.56 crore during FY 2017-18, a growth of 10.47% and profit after tax grew by 17.67%.
Ganesha Ecosphere countered a challenging business environment in 2017-18 in terms of demand slowdown in textile sector owing to GST rollout. Fabric was not subjected to tax in earlier tax system but now it has been brought under GST, which affected the demand.
It was temporary disruption, and we feel that GST was much-needed tax reform and it will help, in longer term perspective, in strengthening the economy and in organising the businesses.
The Company not only countered the challenge with increased output, revenue growth and better profitability but also commissioned a new RPSF production line of 21,000 TPA at its Bilaspur Unit reinforcing our RPSF segment leadership and keeping past growth trend intact.
Availability of new production line with latest technical updates will not only help us to produce more, but also broad base our product portfolio and address the demand arising out of different product segments. While growing our business scale constantly, we have been consistently strengthening our Balance Sheet. Our efforts towards rationalising debt helped in deleveraging the balance sheet on one hand and helped in reporting an improved financial matrix. This, along with a stronger product portfolio, improved servicing capability and enhanced efficiency are helping in posting better returns.
During the year under review, we raised long term debt (net of repayments) of Rs.25.50 crore against new capex of over Rs.90 crore in the new RPSF capacity with moderate increase in debt-equity ratio from 0.32 in FY 2016-17 to 0.38 in FY 2017-18. Further, the business robustness helped us in corporate re-rating which, in turn, helped us to reduce average cost of debt from 10.40% in FY 2016-17 to 9.80% in FY 2017-18.
There are number of reasons that enhance the optimism for our business.
One, the outlook for recycling continues to be sustainable.
From a macro perspective, sustained economic and disposable income growth is driving PET bottle consumption. With the Central Government laying a keen emphasis on recycling, the need and prospects of the organised players in the sector have brightened. Various State Governments, due to increased quantum of plastic waste, showing concern for responsible waste management and insisting for to formalise the pet waste collection mechanism to increase the collection of plastic scrap and diverting the same towards recycling companies. Responsibilities for framing collection mechanism are being directed towards the manufacturers, bulk consumers, brand owners and packagers through extended producer''s responsibility (EPR) concept. This will drive not only increase the quantum of plastic scrap collection but also boost the recycling industry.
Two, the implementation of GST starting mid-2017 will generate long-term benefits for our business.
Three, global textile, apparel and retail companies are consuming increased quantities of recycled polyester fibre. In the Textile Exchange Sustainability Conference, 2017, more than 45 textile, apparel and retail companies pledged to increase their use of recycled stuff by more than 25% by 2020, prospectively broadening the market for our Company. Given this sectoral direction, we believe that Ganesha Ecosphere is attractively placed with rich experience, established raw material pipelines, sizable manufacturing capacities, proven manufacturing technology, strong Balance Sheet, broad product portfolio, consistent customers'' profile and widening presence in India and abroad.
FY 2018-19 promises to be an exciting year in terms of quantum growth owing to full impact of new production capacity as well as emergence of new growth opportunities in terms of optimism spelt out above.
I want to express our gratitude to all our stakeholders - to our customers for their continued trust in our ability to support them and bring value to their business, to our suppliers in helping us to plan our operations as per schedule, to our employees and teams, who represent the foundations of our past, present and future growth and our ability to steer the Company to new heights with dedication, skill and perseverance.
And lastly of course for you, our shareholders, for your unwavering belief in our strategy and judgement.
We would also like to thank all local, state and national governments, the concerned bodies, the banks and financial institutions, for their strong support.
With warm regards,
Shyam Sunder Sharmma