Dear Shareholders,
We are delighted to present to you to our 28th Annual Report of your Company
for the Financial Year 2014-15. This year has been a milestone in making GFL one of the
most successful promoters in the Initial Public Offerings (IPO) market. The key highlight
of the year was the public issue of our wind energy business with the launch of Inox Wind
Limited (IWL) as a listed company in March 2015. The issue received an over-whelming
response from all categories of investors, witnessing an over-subscription of 18.6 times.
We extend a warm welcome to each investor to the Inox family and express our sincere
thanks for making the IPO a grand success.
We are delighted to share with you the progress made in all our businesses in the
Financial Year 2014-15.
Consolidated Operational and Financial Highlights:
At the consolidated level, our total revenues increased by 54.74%, from Rs 3,45,154
Lakh in FY2013-14 to Rs 5,34,081 Lakh in FY2014-15. Our EBITDA and other income increased
by 73.03% from Rs 59,815 Lakh in FY2013-14 to Rs 1,03,501 Lakh in FY2014-15. Our
PAT improved by 214.48% from Rs 1,861.02 Lakh in FY2013-14 to Rs 5,852.65 Lakh in
FY2014-15. PAT margin at a consolidated level has improved from 5.40% to 11.00%. We are
pleased to say that these results are the outcome of robust performance from each of our
business verticals. The break-up of our consolidated revenues comes from the four key
segments the chemicals business, the wind turbine manufacturing business, the film
exhibition business, and the wind farming business, which contributed 25%, 51% and 19% and
5% to total revenues, respectively.
Chemicals Business:
We are pleased to inform you that we performed reasonably well across all our product
segments within our chemicals business.
Looking at the financial performance of our chemicals business on a standalone basis,
we are pleased to inform you that revenues rose by 15.78% from Rs 1,14,094 Lakh in
FY2013-14 to Rs 1,32,097 Lakh in FY2014-15. In parallel, our EBITDA and other income
improved by 46.56% from Rs 18,977 Lakh in FY2013-14 to Rs 27,812 Lakh in FY2014-15,
signifying an improvement in EBITDA margin from 17% to 21%. Our PAT went up by 414% from
Rs 7,443 Lakh in FY2013-14 to Rs 38,235 Lakh in FY2014-15, with PAT margins improving from
7% to 29%. The strong growth in revenues resulted from a combination of the introduction
of specialty chemicals and exports of refrigerants, along with improvements in margins due
to higher operating leverage and efficiencies.
In our chemicals business at GFL, we are reaching an inflection point where our size,
scale, operational efficiencies, investments made in marketing efforts and high
value-added manufacturing is placing us in a sweet spot for increasing market share in the
global markets. As we grow our customer base and start seeing the fruits of our efforts
onafter Tax fell 46% fromdeveloping high-value products and getting customer approvals for
our various grades, we are well positioned to deliver superior business performance with
all our KPIs improving steadily.
Our integrated manufacturing capability and size will continue to give us economies of
scale and keep us competitive in the PTFE marketplace. With this, we expect capacity
utilisation to improve from our current levels of around 60% to reach near-full capacity
utilisation over the next 2-3 years. Higher capacity utilisation and increased
contribution from the higher value-added PTFE grades will result in a positive operating
level and improvement in our operating margins. Our focus on waste recovery and other cost
optimisation schemes should also bring down the operating cost across the value chain.
Finally, we expect good results from our focus on HF and TFE based fluoro specialty
chemicals that are used by pharmaceutical and agro-chemical industries.
Wind Turbine Manufacturing Business:
IWL’s strong operating performance, dynamic management team, superior product
quality, meticulous project delivery capabilities, excellent technology tie-ups and a
major thrust of the Government on renewables have made us India’s leading
manufacturer of wind turbine generators (WTGs). Despite the sector facing challenging
times in recent years, IWL has rapidly scaled up in the last 4 years, with our annual WTG
sales increasing more than four-fold from 120 MW in FY2011-12 to 578 MW in FY2014-15. This
was possible on the back of our unflinching commitment to invest into our business, even
while the rest of the industry is in a stagnant mode.
Our Consolidated Revenues, EBITDA and PAT for FY2014-15 stood at Rs 2,70,993 Lakh, Rs
45,744 Lakh and Rs 29,642 Lakh respectively, resulting in a corresponding YoY growth of
73.00%, 159.50% and 124.10%, and a CAGR growth of 147.8%, 150.1% and 160.9%, respectively,
over the last five years. We have a good visibility of a strong order book of 1,178 MW
with a diversified and reputed clientele, and a land bank equivalent to 4,402 MW. Our 100
meter rotor diameter turbine is expected to be a game changer in the wind industry in
India. With the expansion of our manufacturing facilities and project execution teams and
with new product launches, we expect to be amongst the top of the industry players.
Film exhibition Business:
At Inox Leisure Limited (ILL), despite indifferent content, we were able to deliver
relatively good performance essentially due to our focus on strengthening non-box-office
revenues during the year. Our Consolidated Revenues increased 17% to Rs 10,168.10 Lakh
from Rs 8,688.3 Lakh in FY2013-14. EBITDA increased by 1% from Rs 12,196 Lakh in FY2013-14
to Rs 12,277 Lakh, in FY2014-15, whereas Profit Rs 369.4 Lakh from FY2014-15 to Rs 200.4
Lakh in FY2013-14. We opened 9 properties with 27 screens during the year. We acquired the
regional cinema chain Satyam Cineplexes, which has 9 properties and 38 screens
operational, and currently have a pipeline of 40 properties and 180 screens.
Wind Farm Business:
Inox Renewables Limited (IRL) has a present portfolio of 233 MW installed capacity in
three different States Rajasthan,
Maharashtra and Tamil Nadu. These projects fall under the annuity business with stable
assured returns and rely on internal strength. IRL’s revenues have increased by 9%
from Rs 17,324 Lakh in FY2013-14 to Rs 18,883 Lakh in FY2014-15. EBITDA increased by 12.9%
from Rs 15,566 Lakh in FY2013-14 to Rs 17,581 Lakh in FY2014-15,whereasProfitafter Tax
decreased by 70.8% from Rs 1,537 Lakh in FY2013-14 to Rs 448 Lakh in FY2014-15.
Concluding Remarks
Our leadership team thrives on challenges in staying relevant in today’s dynamic
business scenario. We continue to drive innovation and push for growth in each of our
businesses, and stand firm in our commitment to build a sustainable business, deliver
value to all our stakeholders and serve India’s vibrant economy. Your Company has a
great formula for growth, with a healthy outlook book across all its businesses and a
strong balance sheet. We take this opportunity to thank our shareholders and our employees
for their continuous support in our journey.
Thank You,
Vivek Jain
Managing Director