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My heartiest greetings to you on behalf of Solar Industries India Limited. It is an honour and privilege to share with you the Company''s performance highlights during the year and its plans for the future.
The Indian economy continues to be one among the fastest growing economies of the world, with a GDP of 7.4% in FY19 despite global vulnerabilities of trade wars and tightening of US Monetary Policy.
The Govt. of India has taken multiple steps to progressively improve upon the ‘Ease of doing Business''. The Indian economy has been gaining momentum to grow continuously and the prospects looks brighter.
With various structural changes made in the financial sector and with the emphasis on infra development, I am quite optimistic of the continued growth of the Indian economy in the coming years. I am hopeful that Country will maintain the GDP growth of 7.5% to 8.0% and the Indian economy will be a 5 trillion dollars economy by 2024-25. Solar continues to perform in tandem with its vision, to emerge as a global leader in the industrial and military explosives and an innovative solution provider with a well defined focus on Safety, Quality and Reliability. Today we have manufacturing presence across eight states in India and have a global footprint with four units overseas. We have leveraged our two decades of experience to provide a diversified product portfolio ranging from bulk, packaged explosives and initiating systems to High Energy Materials, Rockets, Mines, Multi Mode Hand Grenades, Missile Warheads, Propulsion Systems etc.
Your Company has made remarkable progress during the year, riding on the growth in Mining and Infrastructure sectors. Our financial performance has been in line with our earlier projections. Our net sales increased from RS,1,916.1 2 Crores to RS,2,4 61.57 Crores; registering a growth of 28.47%. The profit after tax has been recorded at RS,261.61 Crores i.e. 18.62% higher than the last year. Our performance in the Indian market and overseas market has shown impressive growth in view of our strategic planning and sustained efforts. I am indeed proud to say that your Company enjoys a commendable presence and respect in the Global market.
Our export and overseas operations, covering more than 50 countries across the globe, contributes to 35% to the total revenue. Our new overseas operation points in Australia and Ghana will be operational in the FY 2019-2020. With increased exports and overseas expansions we anticipate consistent growth from these segments in the coming years.
In the Defence segment, we continue to expand our capacities and have been expanding the product portfolio in High energy Materials, Rockets, Mines, Propellants Systems, Missile Warheads, Multi Mode Hand Grenades etc. We have an order book of RS,396 Crores in hand and our deliveries are picking up day by day. Our sales is RS,170.20 Crores compared to RS,37.16 Crores last year, registering an increase of 358%. I am confident that this segment will be a major contributor to our business in the coming years. We are all aware that the process of getting the products validated and becoming a qualified Vendor in Defence sector is a slow process but once established there is no looking back.
Another milestone achievement for us was the successful development of Multi Mode Grenade for the Armed Forces which has stringent quality parameters. The DRDO had taken up this project in the late nineties and had been working on its development and User Trials since 2011. However due to stringent Quality and Performance parameters laid down by the Armed Forces, the project was facing various hurdles. We joined hands with DRDO to successfully establish Multi Mode Hand Grenade which is now part of our product portfolio.
We have also participated in multiple RFPs issued by Ministry of Defence for Ammunitions and we expect that these will start to materialize soon.
One of the key factor for the economic growth has been the fast pace of infrastructure development. The budget outlay on infrastructure development has been continuously growing for the last 4 years. Ministry of Surface Transport & Highways has taken multiple measures to ease the stressed assets by implementation of many innovative schemes with land acquisition process being streamlined. This has resulted in NHAI having completed 10,800 KMs in FY19 i.e. 30 KM/ day, the highest so far and aims to achieve a rate of 40 KM/day. The Ministry has also planned to increase the 4-Lane road length from 1.22 Lakh KMs which is 2% of total 5.76 Million KM to 2 Lakh KMs (4%) by 2022-23.
With all this, we see a healthy increase in demand for particularly packaged Explosives in the coming years.
FY19 has seen positive growth in the Mining Sector. This was possible due to various measures taken by the Government like improving the evacuation of coal by creating new Railway Lines, increasing the availability of Rakes by railway by over 10%, helped Coal India Limited & Singareni Collieries Company Limited to show impressive growth of 7% and 4% respectively. Coal India Limited is now in the process of acquiring high capacity mining equipment valued at about RS,7,000 Crores which should boost the coal production in the Country. I am confident that the Coal Industry will continue to grow at 7 - 8% annually. Both Coal India Limited and Singareni Collieries Company Limited have taken a 8% increase in Target for 2019-2020 i.e. 655 MT & 70 MT respectively and the captive coal mines have already shown 10% growth.
Safety Health & Environment
Health, Safety and Environment is an integral and essential part of our business and key to our existence. Our SHE management is modelled on ISO 14001:2015 and OHSAS18001:2007 standards. The policies are framed to prevent and mitigate harm to health and environment. We lay great emphasis on imparting hands-on training to our employees at all levels to create safety awareness.
Acting in accordance with the principles of responsible management, we lay emphasis on corporate governance as crucial to our business sustainability. Good corporate governance is aimed at increasing the value of our business. At Solar, we have a transparent reporting and internal communication system and a policy on corporate governance aimed at active and meaningful engagement with our stakeholder community.
At Solar, we have enhanced our scope of social engagement as we strongly believe that it is our moral duty to provide support to our society at large. Right from the neighborhood environment, we care for the people around us and we take it as our responsibility to work for their benefit and to make a difference to the lives where we can.
With the highly motivated work force, complete product range, best in class technology and strong financials, I am indeed confident that we will increase our growth in the Explosive Industry as we seek expansion of our capacities both Green field and Brown field. Our products and services have been well accepted in the International markets and our existing overseas plants will continue to increase volumes. We have also set a target for ourselves to increase our presence in five other countries in the coming years.
While our product portfolio in the Defence sector is increasing day by the day and the fact that many countries internationally are looking at us for a source of supply having assessed our quality and competence to be on par with global manufacturers, this will certainly form a major component of our business turnover in the coming years. We expect domestic off take to increase substantially as Indian defence establishments are streamlining their domestic procurement procedures and as testing & validations of most of our products are completed.
I take this opportunity to thank the entire team of Solar for their dedication, hard work and commitment, which has helped us to be on the trajectory of success in every field. I would also like to place on record my sincere appreciation towards the Board of Directors for their guidance and my gratitude to all our stakeholders for continued faith in Solar. We together look ahead towards a much bigger future!