Investors

Investors - Chairman's Message

Dear all,

Good Morning. At the outset, on behalf of the entire board, I would like to welcome all of you to the 86th Annual General Meeting of Mukand Limited.

The Financial Year 2023-24 has been a challenging period for our company, characterized by market volatilities and external pressures. Despite these hurdles, I am proud to report that Mukand Limited has demonstrated remarkable resilience and determination.

Our Bloom production at both the Kalwe and Hospet plants reached 5,09,126 Metric Tons, marking a marginal increase over last year’s output. This consistency shows our dedication and ability to maintain production efficiency even in the face of adversity.

In the Alloy Steel Division, we achieved a production volume of 3,58,225 metric tons, while the Stainless Steel Division reached a production volume of 1,50,901 metric tons during the financial year 2023-24.

On the other hand, Industrial Machinery division recorded a segment revenue of Rs. 223 crore, in the FY 2023-24, as compared to Rs. 140 crore of the previous year 2022-23. This success stems from the unwavering dedication and technical expertise of our team, improved market conditions, and the steadfast trust our customers place in the quality of our products.

The total revenue of Mukand Limited stood at Rs 5,197 crore for the financial year 2023-24 as compared to Rs.5,597 of the previous year’s total revenue. This decrease in revenue is primarily due to lower selling prices of Stainless Steel, because of a decline in the raw material costs. However, even in these challenging times, your company was able to maintain a strong market position by focusing on operational efficiency and cost management.

Your company’s Profit After Tax for the year stood at Rs. 103.67 crores for the year 2023-24.

The Board of Directors of your Company is pleased to recommend for your approval, a dividend of Rs 2 per equity share.

As for the financial performance of the company, in the first quarter of the year 2023-24, Mukand Limited recorded a total operating revenue of Rs 1,391 crore, followed by Rs 1,380 crore in the second quarter, reflecting a strong start to the fiscal year. However, this momentum did not continue into the third and fourth quarters as global market scenarios shifted dramatically. The intensification of the Red Sea crisis, a critical route for 30% of the world’s container traffic, significantly disrupted international trade and caused operational challenges that profoundly affected our activities. Consequently, our revenue in the third quarter dropped to Rs 1,188 crore, and in the fourth quarter, it was Rs 1,257 crore.

For the first quarter of the financial year 2024-25, we are pleased to report that the company has achieved total operating revenue of Rs.1,258 crore. The Profit After Tax and Other comprehensive income for this period is Rs. 21.40 crore, a marginal increase from Rs. 20.61 crore in the previous quarter. Subject to no significant unforeseen events, we project an annual turnover in the vicinity of Rs.5,600 crore during financial year 2024-25.

As part of our commitment to the environment and sustainable practices, your company entered into a partnership with Tata Power Renewable Energy Limited (TPREL) for 43.75 MW AC Group Captive Solar project to generate 96.25 MUs annually. This project is estimated to fulfil up to 70% of the total energy requirement of your company’s Kalwe Plant.

Your Company’s Alloy Steel plant at Hospet, Karnataka has inked a Power Delivery Agreement (PDA) with Amplus Phoenix Energy Pvt Limited to set up a 23.89 MWp Group Captive Solar project, in the Gadag district of Karnataka. This solar venture is expected to generate 3.6 MUs annually which shall be used to meet the energy requirements of Mukand Limited’s Alloy Steel production facility.

During the year 2023-24, your company established Mukand Heavy Engineering Limited as its subsidiary to expand its operations in Industrial Machinery Manufacturing and to venture into Gear Box Manufacturing.

As we look at the broader economic landscape, India is set to grow significantly in the coming years. During the fiscal year 2023-24, India’s crude steel production rose to 143.6 million metric tons, up from 125 million metric tonnes in the previous fiscal, reflecting more than 14% growth year-over-year. On the other hand, India’s finished steel exports reached 7.5 million metric tons, marking an 11.5% increase compared to the previous year. Mukand, being one of the leading manufacturers of stainless-steel long products in the country, is poised to play a crucial part in this success story. We are committed to supporting this national objective by enhancing our production capabilities, investing in new technologies, and contributing to the overall growth and development of the steel industry in India.

In the Alloy Steel sector, the automobile industry has shown impressive growth over the past two years, fuelled by higher demand, technological progress, and a growing domestic market. The automobile industry posted a satisfactory performance, with the domestic market growing by 12.5 per cent during the last financial year (FY24) and we are quite buoyant that the industry will maintain its momentum in the year 2024-25 also.

This sector’s projected growth presents a significant opportunity for Mukand Alloy Steel business. As a key supplier to the automotive industry, our advanced alloy steel products are well-positioned to meet the rising demand for high-quality, durable materials. Our strategic focus on innovation and quality will enable us to support the growth of the automobile industry, thereby benefiting from this dynamic sector’s upward momentum.

As we move forward into the year 2024-25, I am filled with confidence that our commitment to excellence and innovation will continue to drive us toward achieving even greater heights. Your Company is continuously focusing on improving operating efficiencies and reducing manufacturing costs for better financial performance. We are optimizing our processes to enhance productivity and ensure sustainable growth. Additionally, our ongoing investments in technological upgradation are aimed at delivering cutting-edge solutions and maintaining our competitive edge in the market. Together, we will strengthen our foundation and strive for excellence in all aspects of our operations.

In conclusion, the Financial Year 2023-24 had been difficult for Mukand Limited, marked by weak domestic demand, surplus imports and tough economic conditions in major European markets. However, even during these demanding times, your company continued its journey of growth. Going forward, your company remains committed to its core values of excellence, innovation, and customer satisfaction as it continues to strive for achieving greater heights in the years to come.

On behalf of the Board of Directors, I extend my deepest appreciation to you, our shareholders, for your unwavering support and confidence in Mukand Limited. I also take this opportunity to thank our valued customers, suppliers, partners and our employees for your trust and collaboration.

Thank you.

Mr. Niraj R. Bajaj
Chairman & Managing Director