An organisation’s success is not mapped by its performance alone. In a difficult business environment, which FY 21 definitely was, it is also a measure of a company’s ability to adapt to the transforming eco-system. It is defined by the speed and agility with which an organisation aligns itself to the new systems and processes. By this yardstick, FY 21 will go down in the history of your Company as quite a remarkable one. Given the backdrop of restrictions in both, the domestic and international markets, and the emergence of Coronavirus variants leading to lockdowns in first quarter of the year and then the emergence of second wave in India, your Company’s performance has been quite satisfactory.
During the year, we were faced with some of the most unprecedented challenges, but effectively managed each one of them with exemplary dexterity. We moved rapidly to adapt ourselves, and respond to the changing needs of our customers. And we did this despite the lockdowns in many countries and the extreme travel restrictions which obstructed us from on-site service delivery. As a result, I am pleased to share that the Company has maintained its leadership position both in the Indian market and internationally. Though the Company did suffer in terms of order booking, production and general growth, the situation was kept largely under control with initiatives taken to continue operations and ensure the safety of employees.
Notwithstanding the 40% decline in the global market and 52% in the domestic market in 2020, in megawatt (MW) terms, the Company was able to cut down the decline in revenue and profits for FY 21 to 14% and 16%, from the 21% and 27% reported for the first nine months of the year. EBIDTA margins showed an improvement from 20.8% in FY 20 to 23.7% in FY 21 – underscoring our sharp cost focus in these difficult times. Profit margin was also largely maintained, versus the previous year, at 14.6%
Global markets, where we have an extensive presence, saw very high volatility amid the lockdowns and travel curbs. Order bookings were severely impacted, as customers found themselves struggling to cope with the challenges of the new business norms, leading to deferment of orders. This naturally had an adverse impact on the turnover, but considering the overall situation, I am happy to say the Company has weathered it quite well, at the back of the cost reduction measures taken during the year, which led to improved EBIDTA margins.
As far as the Aftermarket was concerned, it contributed to 27% of the total turnover in FY 21, up from 23% in the previous year. The key driver of this growth was the rapidity with which we aligned our strategic approach to the unique needs of customers around the world amid the pandemic and effectively seized the emerging opportunity in this area. Responding to the burgeoning demand, we catalysed a bigger organisation-wide push towards digitalisation and automation to cater to the customers’ requirements remotely. We believe Aftermarket to be a major segment of growth for the Company, as the international market from the spares, services and the refurbishment sectors starts opening up gradually over the coming quarters. Our expertise in this segment positions us exceptionally well to secure some large orders in the space in the near future.
The 35% growth in enquiry generation in the domestic market augurs well for the Company, and we see a significant percentage of this translating into order finalisation in the coming years. Process co-generation and waste-to-heat recovery segments are expected to continue to power growth in the domestic market.In the international segment, thermal renewable based IPP power plant and process co-generation dominated the total export enquiry in FY 21, and we are optimistic about stable order inflow at the back of our strong enquiry book.
We are confident that the learnings of the past one year will steer the Company through the uncertainty that continues to overwhelm Indian and global markets. Coupled with our sustained focus design and development, as well as technology upgradation, this will enable us to drive product differentiation and service excellence, going forward. We shall leverage these strengths and learnings to consolidate our leadership position in the domestic market, as well as in sub-30 Megawatts steam turbines in the international market.
EBIDTA margins showed an improvement from 20.8% in FY 20 to 23.7% in FY 21 – underscoring our sharp cost focus in these difficult times. Profit margin was also largely maintained, versus the previous year, at 14.6%.
The prospects for the coming quarters are strong as we see most industries enter investment phases after the lull of the last 12-18 months. We remain vigilant of the new variants and waves of the Coronavirus. We believe order booking in FY 22 will improve from FY 21 levels, specifically from sectors such as API. Overall, we expect the global markets, and our market share in the same, to improve in the short-medium term, driven by resurgence in global businesses after over a year of pandemic-led lull in economic activity. This will be well supported by our technological expertise, strong customer-centric focus, healthy order book and pipeline, strong balance sheet and liquidity position. We remain excited for the Company’s future in an improving macro environment.
With best regards,
Dhruv M. Sawhney
Chairman & Managing Director
What Lent us the Ability to Respond with Agility?
