With our strategic response and efforts of the previous fiscal translating into tangible and targeted initiatives, FY 22 proved to be a notable year for the Company on both the financial and operational metrics.
Dear Shareholders
Having successfully navigated the COVID-19 triggered tribulations, your Company reported extraordinary performance during FY 22 and exited the year with excellent results. I am happy to report that all our businesses contributed significantly to the Company’s growth and profitability. Our positive performance equipped us to effectively lead the journey of self-reliance on which we are partnering with the nation. We see in India’s progress the inclusive and holistic growth of the Company and each of our stakeholders, and have committed ourselves to propel the nation’s efforts towards becoming more self-sustaining.
With our strategic response and efforts of the previous fiscal translating into tangible and targeted initiatives, FY 22 proved to be a notable year for the Company on both the financial and operational metrics.
We reported our highest ever annual profitability, with the Consolidated Profit Before Tax (PBT) going up 25% year-on-year to touch ₹ 574 crore. The growth in Consolidated Profit After Tax (PAT) was even more impressive, with TEIL registering 44% increase to reach ₹ 424 crore. I am happy to share that driven by these numbers, the Company’s Board has decided on a final dividend of ₹ 2 per equity share or 200% for FY 22. Together with the interim dividend paid during the year of ₹ 1.25 per equity share or 125%, the total dividend aggregates to ₹ 3.25 per equity share of the face value of ~ ₹ 1 each or 325% for FY 22. This implies a 20% payout on standalone profits.
What is truly notable about the Company’s exceptional financial performance is that it has come despite lower sales volume in the Sugar segment impacting our net turnover. The overall business performance, however, remained in the positive range on account of the increase in turnover in other segments, with the Alcohol business, in particular, reporting significant gains.
Our healthy performance and growth in the Alcohol segment is the outcome of our strategic focus on partnering India’s ethanol journey, which the Government is continually scaling to further the country’s sustainability goals. We are striving continuously to gain from the Government’s push for ethanol blended petrol. Subsequent to the year, we expanded the operations of our existing distillery at Sabitgarh to 200 KLPD capacity from the earlier 160 KLPD, and also operationalised a 160 KLPD multi-feed distillery at our Milak Narayanpur plant. I am happy to share that the latter became our first distillery to run on sugarcane juice/syrup.
With the imminent commissioning of our grain-based distillery of 60 KLPD and further enhancement of capacities at our existing facilities at Milak Narayanpur and Muzaffarnagar, the total alcohol manufacturing capacity will reach 660 KLPD by July 2022. We remain committed to harnessing the opportunities of this segment to deliver greater value to all our stakeholders, while further consolidating our performance to enable long-term and viable growth. The Indian Government’s decision to advance the E20 by 2025 (20% ethanol blending by 2025) has paved the way for even better growth in this segment, which we are gearing up to capitalise on. Our core capabilities and experience, backed by our focussed strategy of investing in key areas of sustainable long-term growth, equip us to capitalise on the burgeoning opportunities in this segment.
Overall, we see the Sugar business headed in a positive direction at the back of supportive Government policies that are designed to strike a fine balance between cane production, diversion for ethanol, cane price payment, sugar prices. This augurs well for TEIL, which is focussing strategically on premium varieties that yield higher recoveries while promoting efficiencies through modernisation of its sugar units.
Needless to say, our concerted efforts to drive sustainable development, for the Company as well as the country at large, extend beyond the ambit of our Sugar business. The remarkable performance of our Engineering business during the year validates this strategy. The segment reported a 16% increase in turnover during the year, driven primarily by the Power Transmission business. What is truly commendable is that this performance came in a year fraught with multiple challenges, including a COVID-19 catalysed six-to-eight-week shutdown during the second wave of the pandemic in Q1 FY 22.
In the Engineering segment, marked improvement in profitability for both the Power Transmission and Water businesses contributed to the excellent performance of the year. The performance positivity across businesses underscores the Company’s strong ability to identify and tap into new opportunities while staying on course with its plans to strengthen its presence in the existing segments and regions of its presence. It also highlights TEIL’s capacity to adapt to the fast-paced transformations taking place in the market and the evolving needs of the customer, who are becoming more aligned towards self-reliant growth.
We see in this segment strong potential for future growth, given the traction in the demand for industrial gearboxes across key industries, particularly Cement, Biomass and Agri Waste, Steel and Oil & Gas. Government initiatives under the Production Linked Incentive (PLI) scheme are also designed to boost domestic manufacturing as part of the Atmanirbhar Bharat campaign, infusing a strong positivity in the industry. Energy conservation drives, coupled with focus on reducing the carbon footprint, will continue to steer demand for Waste Heat Recovery (WHR) systems & power upgrades in Steel & Cement plants, opening up new stream of business opportunities for TEIL.
We are also extremely optimistic about futuristic growth in the Defence segment, where we currently have a strong pipeline with some niche orders from the Indian Navy, for whom we are a preferred partner in this segment.
Our Water business is also set for scale-up in the near future, as the Government thrust on capacity building and infrastructure development through water management and conservation programmes is leading to a massive growth in the demand for water treatment solutions. Our focus in this business remains on enhancing operational efficiencies, which will enable better profitability and growth in the years ahead.
Another important development that I would like to share here is that in May 2022, the Board of Directors decided to divest the Company’s entire 21.85% shareholding in Triveni Turbine Limited. The move is aimed at unlocking value for stakeholders, with emphasis on timely monetisation of non-core assets, unbundling of businesses, and enabling the Company’s long-term succession planning and facilitation of focussed management. We plan to utilise the divestment proceeds for the growth and expansion of the businesses and for rewarding the shareholders of the Company.
I am confident that this decision will help unleash a bigger opportunity matrix for the Company. We are well positioned to harness this opportunity at the back of our core strengths, expertise and experience, aided by our deep insights into the market trends and drivers. Both our Sugar and Engineering business segments are ideally placed to drive the next level of growth.
From a macro perspective, in the Sugar segment, we are looking at the enhancement of minimum sale price of sugar, which will give a fresh impetus to industry growth and translate into further progress for the Company in this sector. In the distillery segment, as our new capacities come on stream, we will move towards higher revenues and profitability. As far as the Power Transmission business goes, we are looking to expand further in the coming years, to boost revenues and profitability with a bigger footprint across geographies and in global markets. On the Water business front, we are hopeful of the award of tenders that we had been anticipating for the past couple of years to steer our business forward.
I am confident that with the continued hard work of our dedicated workforce, who have actively partnered us in our progressive journey, we shall succeed in our goal to enhance growth and profitability on all fronts. I would like to take this opportunity to thank our teams, as well as our customers, partners, vendors, investors, shareholders and other stakeholders for their contribution to TEIL’s success. Their continued trust and support inspire us to think big and push for the progress of the entire nation, in line with the Government’s vision of self-reliance and in tandem with our strategic plans.
With best regards,
