It gives me immense pleasure to share with you, your Company’s performance for the year 2019-20.
Fiscal 2019-20 was a year of slow growth for the Indian economy, a trend that has been carried over from the previous year and weak sentiments were noted globally even before the outbreak of the COVID-19 pandemic. However, challenging times and slowdowns offer perfect opportunities for us to reinvent ourselves and become more resilient. So, it has been a particularly important year for your Company as we mark the start of a transformational journey to build a future-ready Bajaj Electricals. Over the past eight decades, we have constantly reinvented ourselves and we have now begun laying the foundation for our next decade of growth. Last year, we spoke about ‘Building the Future, Preserving Legacy’ – we will stay true to that ideology as we undergo this transformation.
In the preceding year, we had enjoyed strong growth in our revenues and profitability, but a large part of this was driven by the rapid growth of our EPC business and was accompanied by negative operating cashflows. This had led to a significant increase in debt, akin to many other companies in India. So we took a strategic call in early 2019 to focus on fiscal consolidation and work aggressively on building a stronger balance sheet.
This also necessitated reviewing our business models. While we continued to drive growth in our Consumer Products business, for the EPC business we decided to focus on the execution of ongoing projects while adopting a more calibrated-risks approach towards fresh bidding. As a result, we have seen significant changes in our Profit and Loss Account and our Balance Sheet during the year under review. In FY 2019-20, we saw a decline in total revenue from operations to ₹ 4,977.09 crore from ₹ 6,673.14 crore in the previous fiscal year. We recorded an EBITDA of ₹ 259.56 crore. Our PAT declined to ₹ (0.13) crore from ₹ 167.07 crore in FY 2018-19. This decline in revenues was on account of the strategic intent shared above and the decline in PAT was led by increased interest costs due to high debt build-up. However, the real measure of our performance lies in the sharp balance-sheet turnaround delivered during the year. During the year, your Company generated positive cashflow from operations at ₹ 627.41 crore, compared to a negative cashflow of ₹ 601.92 crore in the previous year. Total debt reduced from ₹ 1,582.21 crore as on 31st March, 2019 to ₹ 957.15 crore as on 31st March, 2020. We also raised our equity capital through a successful rights issue, thanks to your participation. Consequent to all these actions, our debtequity ratio showed a remarkable improvement from 1.47 as on 31st March, 2019 to 0.69 as on 31st March, 2020. Given the sudden outbreak of COVID-19 towards the end of the year, all these fiscal measures and improvements proved to be extremely useful and hold us in very good stead to brace the post COVID-19 economic impact.
Our Consumer Products segment continued to deliver healthy doubledigit growth, ahead of industry growth, implying an increase in overall market shares. This was achieved through a strong focus on our product portfolio with several new launches as well as a very robust go-to-market approach. We have continued to push growth across all distribution channels viz. general trade, modern format retail, e-commerce and institutional and government business. Our most valuable asset remains our brand, especially in the modern, pull-based, hyper-competitive marketplace. Recognising this, we have also embarked upon a fresh and a renewed push for various brandbuilding initiatives. This includes our new brand vision: “Open New Life”.
For our EPC segment, our strategic priority remains the execution of current projects. We have continued to make healthy progress on that front, across various Power Distribution projects in India. Our Power Transmission business continued to grow at a steady pace and achieved multiple milestones. This includes the construction of the longest 400 kV Transmission Line on Monopoles and the successful testing of 5 types of in-house designed monopoles for four different clients, demonstrating our in-house ‘concept to commissioning’ capabilities. In order to maintain our advantage in this segment, we have built a dedicated team of engineers, designers and marketing officers along with investments in state-of-the-art manufacturing units, equipped with latest machinery and innovative procedures required for critical manufacturing processes.
Our Illumination business continues to maintain its dominating position across various sub-segments such as street lighting, industrial lighting and commercial lighting. With evolving consumer preferences, we strongly emphasised on connected and smart solutions. Our robust end-to-end capabilities under one-roof, right from R&D, production and supply to execution and services, enabled us to stay ahead of our peers. During the year under review, we completed the architectural illumination of the prestigious Bogibeel rail-cumroad bridge. It is India’s longest and Asia’s second longest rail-cumroad bridge spanning over 4.94 km over the mighty Brahmaputra River in Assam. This project was highly appreciated globally and was recognised with the ISA – International Solid State Lighting Alliance, SSL Top 100 Award in 2019.
While our businesses continue to evolve and progress, the true foundation for our next decade of growth is being laid through a comprehensive Organisational Transformation. We have initiated multiple initiatives in this regard. We are strengthening our talent pool, including at the senior most levels, with the induction of key senior executives. We are revamping various processes and systems across the Company to drive more collaborative, responsive, robust and secure operational performance. We have also recently implemented and launched SAP Success Factors, a key platform to support our people practices. We are in the process of revamping our Performance Management Systems to build a best-in-class, high performance framework. And above all, we are weaving together a strong organisational culture that binds our people and channelises their energy and talent to deliver exceptional growth for the Company. I believe all these transformative initiatives will equip us with greater agility and resilience, driving us to ensure excellence across our operations.
While we drive our business and organisation, we have always been proud of our values and contributions to society. Through our CSR activities, we strive to contribute towards a holistic development of society at large, with an emphasis on environment, education, healthcare, community development and promotion of art and culture. We also inspire our people to contribute towards the upliftment of society, through participation in various activities and initiatives and encourage them to offer monetary contributions, wherever necessary.
As the last fiscal came to a close, we have all faced major challenges posed by the COVID-19 outbreak and the subsequent nationwide lockdown. This has impacted the economy as well as business performances in the last quarter of the year and is expected to affect performances in FY 2020-21. However, we have braced ourselves for it and our teams have been efficiently responding to it. This is a testimony to the agility that we are developing as an organisation. So, while the environment remains challenging, I am confident that we, as an industry and as a company, will recover faster, relative to many others. And even as we address the short-term cautiously, we shall remain firmly focused on our longer term strategic objective of driving growth.
I would like to acknowledge and thank our entire management team, employees, and business associates for all their contributions and efforts and for being a part of this transformative journey. I specially take this opportunity to thank our Executive Director, Anuj Poddar for his contributions to Bajaj Electricals’ transformation journey. Finally, to my colleagues on the Board, your support and guidance is invaluable for the Company. Most importantly, I remain grateful to you, our shareholders, and as we embark on our journey to the future we all remain committed to continuously deliver value to you.
Chairman & Managing Director