"Our future promises to be even more exciting.
We have charted a growth path that promises to sustain business growth
over the medium% term." ^
Hope you and your loved ones are doing well and prospering. It gives me
immense pride to present the 37th Annual Report of the Company as we closed FY22 with
great numbers. It highlights our ability to scale our performance higher in an otherwise
perplexing year.
From the events of the last few years, it is quite evident that we live
in an age of disruptions. Even as the world was recovering from the pandemic over the
previous two years, geopolitical turbulence impacted the world severely - intensifying the
already heightened inflationary pressure and further disrupting the fragile global supply
chain balance. Despite the turbulence, the Indian economy registered a healthy recovery in
FY22 driven by a resurgence in all three segments of the economy, particularly the
industrial segment.
In these troubled times, our team at Atam Valves responded with
exceptional resilience in navigating through the volatility breakers. Leveraging our rich
experience, domain knowledge and expertise we continued to envision opportunities and
worked with speed to capitalise on them. We strengthened the connect with our customers,
we delivered better and faster to fortify their trust in the ATAM brand. In doing so, we
reported very satisfying growth.
Revenue increased by 11%, EBITDA grew by 33% and Net Profit leapfrogged
by 67%. What was very satisfying was that our EBITDA margin improved by more than 260 bps
despite the inflationary pressures. This improvement was owing to an increase in the
proportion of value-added products in our revenue mix and our ability to pass on some part
of the cost
increase to our clients. Moreover, our Return on Capital Employed
improved by more than 300 bps.
It showcases our ability to utilise every rupee invested in the
business, better.
This stellar performance was the result of the unwavering passion and
disciplined efforts of the entire team. They have gone above and beyond to brave the odds
and supersede their given targets. I feel immensely proud to be a part of such a dedicated
and energised team.
I take pleasure in mentioning that we have articulated our dividend
policy. We will distribute 15% of our Net Profit to shareholders as dividends. We need to
maintain this prudent balance in keeping with the reality that we are a growing company
and will need to invest in strategic initiatives that help us to sustain our growth
momentum.
Into the looking glass
Our future promises to be even more exciting. We have charted a growth
path that promises to sustain business growth over the medium term.
* We have decided to acquire AMCO, a sole proprietorship enterprise
that manufactures Industrial Valves, fittings and Boiler mounting having a wide market
segment. AMCO has state of art manufacturing facility at Gagret, District Una, Himachal
Pradesh.
Until the deal is finalised, AMCO has started, in the later part of
June, to sell the complete production to ATAM.
* We will continue to introduce new products to remain relevant to our
customers and capitalise on opportunities arising from the changing dynamics in the
sectors of our presence. This will ensure that we continue to occupy our preeminent
position in the industrial value space.
* We plan to diversify into a consumer-facing space - bathroom
fittings. This is an interesting value- add for us. The bathroom fitting space is
cluttered in the premium segment with global and domestic brands. Then there is the
low-end segment which is occupied by the unorganised segment. The segment between the two
ends of the pyramid is large but relatively uncluttered. This is where we will establish
our brand. Moreover, valves are a critical part of these products, where we are experts.
We need to add the aesthetics. The project report is under preparation. Hopefully, I will
be able to share more on this project in my next communique.
* We will continue to focus on ideating and implementing new thoughts
to sustain our growth.
About FY23...
FY23 is replete with uncertainties. Rising interest rates, the extended
war scenario, additional fractures in global relations and other issues continue to
challenge our progress. Being a strong enterprise rooted in our ethical value system, an
energetic workforce and an innovative spirit, I believe we are ready to deliver an even
better performance in the current year which should create wealth for all our
stakeholders.
Acknowledgment
I take this opportunity to extend my gratitude to all stakeholders for
their support in our stimulating journey this far. I solicit your continued cooperation.
Wishing you safety and well-being to you and your families.
Vimal Jain
Chairman