Shaping our tomorrow
Dear Shareholders,
Across the world, the year gone by was one of significant instability.
The rising geopolitical tensions and volatility in input prices slowed down the
macroeconomic scenario across most countries, affecting the demand for dye intermediates
and pigments.
Closer home, the Indian economy witnessed sustained buoyancy, recording
one of the fastest growths among major economies. However, the chemical industries
continued to face the heat due to various challenges and dynamic factors. On the supply
side, supply chain bottlenecks and higher energy prices emanating from geopolitical
disturbances led to operational and cost pressures. On the demand side, dumping by
competing countries, especially China, at lower prices led to pricing pressures. This was
kind of a triple blow for the Indian dye and intermediates companies – lower
international demand, higher input costs and reduced pricing power. This impacted both the
operational and financial performances of most companies. Your Company along with the
industry peers are contemplating these issues, especially anti-dumping duty relief from
China, though the pace of resolution is slow and these may persist a little longer.
Facing the storm head-on
Amidst the tough operating scenario, two of our products, H-Acid and
CPC Green were under pressure. The performance of our Precipitated Silica product line was
encouraging, with significant breakthroughs and increased adoption. We are happy with the
wider market and customer coverage that it has opened, putting us in a position of
strength. Overall, I would say the performance of our products was resilient considering
the broad-based downtrend seen in the basic chemical industry. We continue to develop our
product strength, aligning with the market scenario.
We closed FY 2023-24 with a revenue of Rs. 30,204.70 lakhs, a decline
of 9.75% over the previous year. High costs and lower realisation impacted profitability.
EBITDA stood at 149.93 lakhs, while at a net level, we incurred a loss of Rs. 1,867.73
lakhs. Despite the extended period of challenges, our financial health and liquidity
position are robust. The net worth is healthy at Rs. 25,918.63 lakhs and the net debt to
equity stood at 0.20, giving us an adequate cushion for the long term.
Looking beyond challenges
The chemical industry in India has undergone a remarkable
transformation, propelled by rising urbanisation, technological advancements, and
population expansion. It has evolved into an integral and indispensable component of the
nation's economic landscape. Though the current phase is nothing but momentary and
markets should soon improve.
Aksharchem has exhibited sustainable performance despite this highly
vulnerable period. As soon as the situation of geopolitical instability and the global
economy starts improving, we believe our performance will be back on track. Our actions
around strengthening customer relationships, diversification with new product line, cost
optimisation and capacity expansion position us for a better future.
The success of the Precipitated Silica venture is a silver lining. Our
silica grades have been commercially accepted and approved by all key tyre and non-tyre
rubber companies in India and abroad. Given the challenging international markets, our
strategic decision to focus on the domestic market has paid off. We are already in
commercial transactions with all the key tyre and non-tyre rubber customers in India. The
focus now is to leverage this foundation to target overseas customers to widen our network
of customers.
Our aspiration over the coming years is to emerge as one of the top
three silica suppliers with exceptional quality and service. Every activity within the
company is directed towards this objective. We are underway with various capex programmes,
scheduled for commissioning during FY 2024-25, which shall help expand our offerings to
value-added silica grades and open new opportunities. Our target is to operate these
capacities at 100% utilisation.
Focused on value creation
Nobody knows how long the global macro situation will last, that is
beyond our control. I can assure our stakeholders that Aksharchem will come out stronger.
With our solid business fundamentals, strong position across key products, the agility
shown by our teams in creating new markets and customers and the encouraging feedback we
get from them, we are confident to rebound soon.
I thank all our stakeholders for their constant support and
encouragement. Your trust in us gives us strength and motivation to think beyond today and
keep pushing ourselves. I thank all our business partners and employees for staying strong
together with the organisation, and ensuring we continue to surpass the expectations of
the customers. Our aspirations going ahead are bigger and we seek the continued support of
all stakeholders so that we can achieve greater things and create value for all.
Warm regards,
| Paru M. Jaykrishna |
| Chairperson |