Our robust business model, deep-rooted strengths, strong execution capabilities and visionary approach make us the frontrunner in maximising the potential for growth across our businesses.
There is a lot of dynamism and optimism prevailing, across our business segments.
In the Sugar industry, international sugar prices rallied to record highs in 2023, while in the domestic market, robust sugar production, much above the consumption levels, has led to a surplus. Over the years, this has led to India becoming a regular exporter of sugar – an extremely favourable development for the domestic industry. Further, the progressively increasing diversion of sugar for ethanol production under the EBP programme has added a new layer of positivity to the industry environment.
On the Engineering front too, there has been a remarkable spike in the demand for gears and gearboxes, both in the OEM and aftermarkets segment, particularly from the fast-growing segments of Oil & Gas, Waste Heat Recovery (WHR) and Waste to Energy (WtE). The Defence segment has also seen a massive push as a result of the Government’s indigenisation focus. In the Water and Wastewater Treatment business, too, we have seen an enhanced focus on innovative solutions, especially in the EPC and HAM modes.
Overall, the environment is extremely positive and conducive to sustained long-term growth. Our robust business model, deep-rooted strengths, strong execution capabilities and visionary approach make us the frontrunner in maximising the potential for growth across our businesses.
It has been quite a remarkable year for all our business segments at the back of our targeted investments and focused initiatives. The record overall gross revenue went up 34% to ₹ 6,310 crore while net turnover increased 31% to touch ₹ 5,617 crore, led by strong performance across the board. Profit before Tax (PBT) before exceptional items and tax stood at ₹ 562.4 crore, while Profit after Tax (PAT) for the year was ₹ 1,791.8 crore.
From the highest-ever sugarcane crush to significantly enhanced refined sugar production including the highest-ever pharmaceutical sugar and record sugar export realisations, our Sugar business touched many milestones of achievement during the year, mainly on account of our sugarcane development programme, modernisation and debottlenecking activities undertaken during the off-season, and increase in capacity for refined sugar.
Our Alcohol production increased by 68% to touch a record 18.12 crore litres for the year, at the back of enhanced capacities, productivity and efficiencies. The net turnover of the Alcohol business increased by an impressive 75% during the year. The revenues from distilleries contributed 21% of our net turnover, underlining the success of our investments in this business.
In the Engineering business, the combined Power Transmission and Water businesses crossed the milestone mark of ₹ 500 crore, to report an aggregate revenue of ₹ 577 crore for the year. The combined outstanding order book for the Engineering business at the close of FY 23 was over ₹ 1,650 crore – a clear indication that we are on the right track towards sustainable business growth. The turnover growth for the Power Transmission segment (which includes Defence) stood at 22%, and the Water business posted over 30% increase in revenues over the previous fiscal. The PTB order book grew 17.7% over the previous year, with the addition of 18 new customers in the aftermarket segment.
The numbers clearly underline the Company’s strong credentials and customer confidence, and the success of our revenue diversification strategy.
It has been quite a remarkable year for all our business segments at the back of our targeted investments and focussed initiatives.
Climatic conditions pose a risk to our Sugar businesses, in particular driven by erratic weather conditions, diseases and pests etc., which affect the sugarcane yields and sugar recovery. In our engineering businesses, fluctuations in industry demand and economic uncertainty are the key challenges faced by the business.
The Company overcame these with enhanced focus on self-sufficiency, along with diversification of products and services as well as customer base and geographies. Our strong history of profitability and healthy returns has enabled us to ensure sustained stakeholder value creation. Further aiding our growth has been our enhanced focus on diversification, with high-quality CapEx in modernisation of facilities and setting up of additional multi-feed distillation capacities. Our investments in new facilities for Alcohol, Power Transmission and Defence are, additionally, a key to long-term value creation for the shareholders.
In the Sugar business, technological upgradation and an improving product mix are supporting growth. Capturing value in the export market through appropriate timing, which led to good margins, has further helped us scale profitability.
In the Alcohol segment, capacity augmentation has equipped us to meet the growing ethanol demand in the country. Our strategic decision to focus on B-Heavy Molasses (BHM) and Grain based ethanol instead of sugarcane juice is yielding economic benefits to the Company.
In PTB, we continued to gain market share through more customer acquisitions, with focus on increasing the addressable market internationally. Expansion of the Aftermarket share in our business has further given the market edge that will steer our long-term sustainable growth.
Our strong technical and financial qualifications, collaborations in the Water & Wastewater Treatment segment, along with our robust relationships with our supply chain partners, are some of the other strengths we have progressively built over the years, and which are enabling sustained business growth along with new vigor towards the international markets.
In FY 23, we initiated several significant investments to strengthen our business proposition in the areas offering the maximum potential for enhanced growth and expansion.
Besides modernisation of our manufacturing units, we expanded our refined sugar capacities from 40% to 60% of our total sugar production, to boost volumes and sales, and to improve margins since refined sugar gives better realisation. At the same time, we continued to focus aggressively on strengthening our sugarcane development programme. The last couple of years have seen major interventions and investments by the Company in enhancing the scale and reach of this programme to create a quality pool of raw material supply for our Sugar businesses.
Our investments in the Alcohol business were also focussed on capacity enhancement, backed by raw material and product flexibility. With our strategy aligned to the Government’s thrust on ethanol blending, we have scaled up our distillation capacities to 660 KLD, and have already announced CapEx to further boost them to 1,110 KLD to meet the increased demand for ethanol.
In the Power Transmission and Defence segments, too, we continued with our capacity expansions, along with enhanced focus on R&D and innovation for leveraging new opportunities in both, the domestic and international markets. Our strategic investments in both Product and Aftermarket have placed us in an ideal position to make the most of the unfolding growth opportunities, particularly in the steam turbines, compressors and gas turbines, and pump segments, as well as the steel, cement, oil and gas, and waste heat recovery sectors.
Our Defence business is also seeing the benefit of the expansion of our products and solutions portfolio. In our Water business, we are focussing aggressively on expanding our international footprint, while pushing for more EPC/HAM/ PPP projects, where we are seeing a huge opportunity for growth.
It has been a year of record-breaking performance for our Sugar business. We achieved a year-on-year increase of 11% in sugarcane crushing to deliver the historic high, with six of our seven sugar units recording their highest ever crush to enable this exceptional feat. Recoveries were lower across the state of Uttar Pradesh, where we operate and, while our recoveries declined as well, we performed relatively better as compared to state averages and peer groups.
With the increase in costs during the year, including sugarcane price increase in SS 2021-22 and largely stagnant domestic prices in FY 23, the Company has focussed on other measures, such as cost controls, improving crush and recovery, remunerative product and export strategy, to mitigate the impact.
We produced and exported large quantities of EC2 grade sugar, which fetched us good realisations. As sugar export prices were at a considerable premium to the domestic prices, exports have contributed significantly to profitability.
Our Deoband unit, which stabilised very quickly after its conversion to a refinery, produced good quality refined sugar during the Sugar Season 2022-23, leading to enhanced production and realisation. We also produced the highest ever quantity of pharmaceutical grade sugar from our expanded production facility at Sabitgarh.
We plan to continue with the debottlenecking of our manufacturing units and strengthening of our cane development initiatives. Government policies and programmes also continue to aid the sugar industry’s growth and self-sufficiency.
We achieved a year-on-year increase of 11% in sugarcane crushing to deliver the historic high, with six of our seven sugar units recording their highest ever crush to enable this exceptional feat.
There has been a substantial increase in the production and sales volumes in the Alcohol business following the expansion of the distillation capacities, as shared earlier. The increased crush provided more raw material for the distilleries, leading to higher revenue contribution.
We see a lot of new demand in this segment in view of the Government’s EBP targets and push to ethanol, and are all geared to further augment our distillery capacity. We believe that to meet the aggressive Ethanol Blended Petrol (EBP) targets of 20%, the Government may need to rectify prices of ethanol produced from sugarcane juice and grain. This is essential to improve project viability to facilitate further additions in distillation capacities.
The Company is looking to produce in excess of 21 crore litres for FY 24, which is a 17% increase from FY 23.
It has been a good year for our Power Transmission business, with TEIL posting record turnover and profitability, driven by product sales across OEMs. At the same time, we are making huge strides in the international market, with excellent response from international customers.
Our investments in this segment will help us capitalise on both domestic and international opportunities, particularly in the light of the Government of India’s Make in India initiatives, across the Power Transmission and Defence businesses. In Power Transmission, we see a very promising outlook in the high-speed gears category across sectors in the domestic market. Our aim is to increase our market share in the product segment, especially from the international market, through advancements in technology and focus on new and existing customer relationships. The establishment of a dedicated multi-nodal facility for Defence products will help the business gain confidence of key customers and expand its service offerings.
We are also striving to increase our footprint to capture high-growth opportunities for Aftermarket segment through a combination of own efforts and expansion of the agents’ network.
We are currently seeing a lot of innovation taking place in the Engineering Business, and much of it is taking place in the sustainable stream. In FY 23, we launched several new product lines and process changes, which will open new opportunities for us to increase our market share and installation base within and outside India.
With our strong R&D capabilities and technological edge, we have successfully entered into a new series of Integrally Geared Compressor internals with high precision accuracies for a renowned European customer. We have also forayed into a high-power compressor gearbox, where we see significant global opportunity for future expansion.
A key development in the Defence segment was our foray into a specialised vertical of propulsion shafting after we secured an order for prestigious Main Propulsion Shafting for Subsurface platform. We have also developed the design special application pump for Navy which will pave the way for similar requirements in future.
These, and other product innovations in the PTB and Defence segments, are designed to steer our growth trajectory even more intensely in the coming years.
Our Water business (WBG) is getting recognition in the high potential water market as a supplier of superior quality products and services at competitive costs. This segment reported its highest ever turnover in FY 23, at the back of our focussed approach towards execution. Revenues increased by 30.3% driven by better execution. The orders received in FY 23 stood at ₹ 192.08 crore excluding O&M orders.
We are bidding in more international projects, with funding from reputed international agencies. Our success in Maldives and Bangladesh has given us the confidence of excellent growth in overseas markets, going forward. In the domestic markets, opportunities are increasing in PPP, EPC and HAM projects in recycle and reuse of water, as well as in Sewage Treatment Plants, and we are well positioned to harness these.
Overall, there is a strong optimism for volumes, revenue and profitability in all the segments of our business. Our capacity expansions, along with our judicious management strategies, are empowering us to make the most of the emerging opportunities. Besides modernisation, digitalisation and capacity enhancement, our focus in the Sugar segment is on varietal replacement and yield maximisation programmes, in addition to aggressive pest and disease surveillance.
In the Alcohol business, we expect the Rani Nangal distillery to be commissioned by the end of FY 24, followed by the Sabitgarh distillery, which will give us additional capacities to match the ethanol demand growth.
Our Power Transmission business is looking at a highly promising future, with infrastructure growth for the key sectors such as steel, cement, waste heat recovery sectors auguring well for our products, both domestically and internationally. We are looking at market share gains in export markets as we focus on export revenues from our factory in Mysuru.
In the Defence segment, we expect increased order bookings from key segments, with many Request For Proposals (RFPs) expected to conclude in the coming months. Our dedicated multi-modal facility for Defence products in Mysuru will be commissioned in FY 24, driving further growth in this business.
The Water business, as discussed earlier, is seeing a lot of opportunities emerging in the domestic and overseas markets and we are aggressively pursuing the same.
Our capacity expansions, along with our judicious management strategies, are empowering us to make the most of the emerging opportunities. Besides modernisation, digitalisation and capacity enhancement, our focus in the Sugar segment is on varietal replacement and yield maximisation programmes, in addition to aggressive pest and disease surveillance for the control of crop infection.
During the year, the Company divested its entire stake of 21.85% stake for a net consideration of ₹ 1,593 crore, in Triveni Turbine Limited (TTL), an associate company, with the aim of monetising the non-core assets & enhancing shareholder value. Strong investor demand led to the shares being sold to various marquee investors. The move was also aimed at unbundling of the businesses, enabling long-term succession planning and facilitate focussed management for TEIL. Apart from distribution to shareholders, proceeds from this divestment will also help fund the business growth and expansion, and drive greater stakeholder value creation.
