Yasho Industries Ltd

MANAGING DIRECTOR'S AND CEO'S MESSAGE

Our revenue for the year grew by 21% from Rs. 29,706.30 Lakhs to Rs. 35,943.60 Lakhs in FY 2020-21. Turnover volume increased by 21% at 7712 MT from 6388 MT in the previous year. This year, over 62% of our total revenues were contributed by exports, compared with t 57% in the previous year.

Dear Shareholders,

I write to you during unprecedented times and trust you all are in good health. The COVID-19 pandemic has adversely impacted millions of lives and economies across the world, bringing industries and businesses to a grinding halt. Nonetheless, the economic activity is expected to rebound on the back of favourable policy reforms and successful roll-out of the vaccination drive; however, the intensity and depth of the second wave of infections may derail this rebound.

OUR PERFORMANCE

At Yasho Industries, we demonstrated strong resilience and registered a robust performance during the year. Continuous product innovation, customer centric approach, and capacity expansion enabled us to deliver on our commitments and sustain growth momentum despite the challenging business environment.

Our revenue for the year grew by 21% from Rs. 29,706.30 Lakhs to Rs. 35,943.60 Lakhs in FY 2020-21. Turnover volume increased marginally by 21% at 7712 MT from 6388 MT in the previous year. This year, over 62% of our total revenues were contributed by exports, compared with 57% in the previous year. EBITDA grew by 38% to Rs. 5908.64 Lakhs from Rs. 4291.47 Lakhs in the previous year. Our improved performance was driven by new product development, better capacity utilisation along with robust demand for our products worldwide.

Net profit grew by 78% to Rs. 2147.74 Lakhs from Rs. 1204.46 Lakhs in the previous year. This was owing to higher demand from overseas markets and upscaling of demand owing to pollution issue in China. Value-added chemicals, particularly Rubber, Lubricants and Specialty segment, contributed a significant amount to our profitability this year. With demand for these chemicals constantly increasing in the international market, we expect specific segments to perform well and contribute to future growth and profitability.

As you would expect, we stringently adopted all COVID-19 appropriate safety protocols across our locations and also implemented additional measures to ensure health and wellbeing of all our people in these testing times.

ENSURING HIGHEST QUALITY AND CONSISTENCY

Quality and consistency is of paramount importance to us. We understand the criticality of our business for downstream companies and ultimately the end-users. We strive to maintain high standards of quality, while also attracting newer customers and strengthening relations with the existing ones. In recent years, we have spent considerable amount in purchasing state-of- the-art instruments which help us monitor our product quality. Further, though having multipurpose plant, we have automated several plant processes which minimise batch to batch variation and helps us deliver consistent quality products.

Our stringent checks and a quality control team ensures that quality is maintained through every process - right from procurement of raw materials to delivery. We also adhere to all the national and international quality standards. Our manufactured products are first sent to the Quality Department, where quality of the finished products is inspected on a sample basis, putting them through various test parameters and testing methods. Regular quality audits are also undertaken by the in-house quality control team.

GROWING DEMAND FOR SPECIALTY CHEMICALS

The Indian specialty chemicals market is increasingly gaining importance as the world looks to reduce its dependence on China. Globally, specialty chemicals is estimated to reach USD 953.9 billion by 2027, growing at a CAGR of 5.0%. India's specialty chemicals sector is also expected to grow rapidly, and will be driven by increased application in different products. A unique combination of talented manpower and low-cost production makes India an ideal production hub for global markets.

BUSINESS OUTLOOK

Our core competencies include a diverse portfolio, long-standing customer relationships, and outstanding technical and manufacturing capabilities that make us globally competitive. We are well qualified with respect to experience, certifications, and possess an in-house R&D team to develop and deliver products indigenously. We continue to see improving performance across end user industries on the back of robust demand. We are also witnessing a shift in international trade patterns and believe this is an opportune time for Indian chemical players like us.

In the wake of the COVID-19 pandemic, many companies across the globe are scouting for new alternate vendors and we are happy to qualify and become their long-term business partner. Therefore, we are working on increasing our exports to fill capacities, especially for the industrial and specialty chemicals segment.

Our stringent checks and a quality control team ensures that quality is maintained through every process - right from procurement of raw materials to delivery. We also adhere to all the national and international quality standards.

Further, government's powerful 'Atmanirbhar Bharat Abhiyan' will be fundamental in promoting domestic manufacturing and increasing India's self-reliance, thus presenting enormous opportunities. We are also focused on enhancing capacities and improving product mix to encapsulate the upcoming opportunities presented by our customer industries spread across the globe. Our primary goal is to ramp up our existing capacity to an optimum level. As we lay the foundations for a strong and future-ready business, our newly expanded capacity of Rubber, Lubricant, and Specialty chemicals will fructify in the coming months.

As part of our Corporate Social Responsibility, we strive to promote livelihoods and ensure holistic development of our communities. During the year, we contributed a sum of Rs. 10 Lakhs towards CM relief fund in Gujarat and Rs. 5 Lakhs towards PM relief fund to help the government combat the COVID-19 pandemic. We are also assisting in rebuilding of a primary school in Kocharva Village, Vapi and equip it with the latest technology such as classroom projectors, computer laboratory, etc.

CONCLUSION

I would like to take this opportunity to thank our esteemed stakeholders, our shareholders, our customers, our suppliers, our business partners, and our family of dedicated employees for their unstinted trust and support in these difficult times.

We remain satisfied with the progress we are making, yet we believe that we still have a way to go. We believe that the combination of our inherent capabilities, expert management, innovation strength, and culture of customer-centricity will support us in our journey of driving consistent growth and success.