Progressive momentum purposeful journey
Despite global headwinds India continues to be one of the world's fastest growingmajor economies. Although the growth rate was muted and stood at 6.8% in the reportingyear marginally lower than that of FY 2017-18 the fundamentals of the economy continueto be robust with moderate inflation low fiscal deficit (3.4% of GDP) accommodativemonetary policy by the Reserve Bank of India and gradually improving private investmentcycle. Infrastructure creation continues to be one of the major priorities of theGovernment of India; and with interest rates declining and additional liquidity in theeconomy the infrastructure space is likely to see significant activity which augurs wellfor cement demand.
India is the second largest cement producer globally; and has a huge helping hand instrengthening the country's infrastructure space and accelerating economic development.The cement sector is likely to grow sustainably propelled by higher government spendingin airports ports railway corridors highways smart cities affordable housing andirrigation among others.
Capitalising on India's favourable macro-economic indicators we are happy to reportanother successful year for J.K. Cement. We reported 8.3% growth in revenue fromoperations to ' 4919.19 Crores in FY 2018-19 compared to ' 4542.59 Crores in FY2017-18 driven by sustained cement demand on the back of a growing housing segment andhigher infrastructure spend. Our EBIDTA increased 6.5% to ' 810.12 Crores in FY 2018-19vis-a-vis ' 760.66 Crores in FY 2017-18 owing to better efficiencies across the board. Wemaintained a healthy EBIDTA margin of 16.47% in FY 2018-19. Our net profit stood at '324.90 Crores in FY 2018-19 and our earnings per share stood at ' 45.28 in FY 2018-19.
Our integrated approach to cement production allows us to rationalise our costsespecially those pertaining to power supply requirements raw materials and logistics.This enables us to offer our products at competitive prices strengthening our marketleadership and brand recall.
As you already know our spectrum of products comprises grey cement white cementwhite cement based wall putty and certain other value-added products which aremargin-accretive.
In the grey cement segment we have embarked upon a robust expansion journey whichwill enable us to grow our industry prominence.
We are committed to invest ' 2000 Crores to enhance our grey cement productioncapacity to 15 MnTPA by the end of fiscal 2019-20 from present capacity of 10.50 MnTPAand expanding our presence into existing markets of Gujarat and Uttar Pradesh.
We have made substantial progress in our brownfield expansion of cement grindingcapacity at Mangrol and Nimbahera Rajasthan by 1 MnTPA which is likely to be commissionedby the middle of fiscal 2019-20.
Moreover our capacity expansion for our clinker production line at Mangrol and splitgrinding units at Aligarh Uttar Pradesh and Balasinor Gujarat are going on in fullswing.
We obtained the environment clearance for Balasinor unit also during FY 2018-19.Already we have spent over ' 550 Crores for these expansions.
Our expansions are funded through a judicious mix of debt and internal accruals. As on31st March 2019 our gross debt stood at ' 2199 Crores with a healthy debt equity ratioof 0.76. Moreover we raised ' 511 Crores through a qualified institutional placement(QIP) in December 2018.
To expand our market share we are reinforcing our distribution network by addingadditional authorised dealers and retailers to our network and strengthening ourrelationships with existing dealers. We are regularly organising dealer meets'which involve knowledge share on marketing and sales techniques and technical applicationsof cement products.
We are one of the two major players in India's white cement market. We have anaggregate installed capacity of 0.60 MnTPA and 0.90 MnTPA for white cement and wall puttyrespectively in India. Our dual-process cement plant is having capacity to produce bothwhite and grey cement (interchangeably) in Fujairah U.A.E; and is currently used formanufacturing white cement only with a capacity of 0.60 MnTPA. During FY 2018-19 wecommissioned an additional installed capacity of 0.20 MnTPA of white cement-based wallputty at our Katni plant in Madhya Pradesh.
We have undertaken wide-ranging measures for resource optimisation energy efficiencywater conservation monitoring and controlling emissions waste management andconservation of biodiversity thereby helping us to protect the environment. Variousinitiatives have been undertaken to fulfil our sustainability agenda. We believe theseinitiatives are helping us move towards our objective to build a more sustainable future.
Our empowered talent pool drives our business and sustainability initiatives. We investsignificantly to upskill our talent pool and motivate our go-getters to rise to thechallenge. We offer remunerations rewards and growth opportunities through continuouslearning and knowledge transfer. We promote diversity and inclusiveness in our team thatunderpin our HR policies thereby supporting our sustainable business agenda.
Beyond business priorities our focus has always been on giving back to society bycreating shared value. Our community interventions comprise education art culture andcommunity welfare environment rural infrastructure development health and development.Our social activities include initiatives in the domains of education community hygienelivelihood support vocational training and skill development.
Before I conclude let me inform that rewarding shareholders sustainably remains at theheart of our business strategy. I am happy to inform that our Board has recommended adividend of ' 10 per share (face value: ' 10) for the year under review.
As I look into the future I am optimistic that cement demand is likely to growsustainably.
The demand is projected at 6-6.5% compound annual growth rate (CAGR) from FY 2017-18 toFY 2022-23. We are well positioned to capitalise on emerging industry opportunities; andseek the support and guidance of all our stakeholders in our progress.
Chairman and Managing Director
DIN - 00050364