Industry Structure and Developments
In 2023, ELANTAS Beck India Limited ("Company / EBIL") sustained its positive momentum, capitalizing on heightened demand during the seasonal months of the year to achieve record revenue milestones. Despite facing challenges such as the continued Russia Ukraine con?ict and uncertainty stemming from the Middle East con?ict which disrupted supply chains your Company remained steadfast in its e?orts to ensure supply continuity for customers while minimizing cost impacts.
By continuing to build a better understanding of the market, your Companys teams managed the volatile costs situation through e?ective price management to maximize value creation for your Company and the industry.
Strategic investments in new product development and additional manufacturing assets allowed your Company to position its products to meet the demands of emerging applications. Reporting a record revenue of 67,528.50 Lakhs, a 5.20% increase compared to 2022, with a margin of 22,249.09 Lakhs, up by 24% over 2022, your Company achieved its highest-ever sales. Focused on developing innovative solutions to address evolving industry trends, your Company continued to grow despite a subdued in demand through the year.
To bolster its market position, your Company capitalized on increased capacity at its Ankleshwar plant, Gujarat in 2023 and also prepared to meet the additional demand growth as the economy expands, through requisite permissions. The Companys team remains committed to anticipating industry requirements and delivering value-added products through its technology leadership and local manufacturing capabilities.
Segment wise Performance Electrical Insulation Business
The Electrical Insulation Business comprising of Wire Enamels and Secondary Insulation products account for approximately 85% of your Companys sales revenue and constitutes the core business of your Company.
Your Company continued its focus on expanding its product basket in line with the industry expectations and sustained its growth in the value-added segments.
Your Company continues to focus on the trends in the market to sustain and grow its business in the coming period driven by:
Electronic & Engineering Materials
Electronic & Engineering Materials business comprises of Electronic & Electrical Compounds (EL), Hardeners and Engineering Materials (EM) and accounts for approximately 15.00% of your Companys sales revenue.
The EL Business has specialty products in Electronics, Auto Electricals, Filters & High Voltage Capacitors application, in addition to emerging opportunities in E Mobility. The sustained focus on new product and application developments in the electronics segment along with a focus on improved engagement with the stakeholders helped your Company to sustain business with maximized profitability amidst slow growth in the market.
The EM business has products for Industrial Flooring, Exterior Coating, Structural Repairs, Sealants and Adhesives. Your Company focused on improved business efficiency to maximize profitability, with strong initial traction on new, value-added product introductions focused on emerging segments, which will help this business to grow its volume and value in this segment.
Your Companys focus on this business lines over the last years has yielded results via new product introductions, new projects and customer additions. In the current year your Company is anticipating that this business will sustain and grow with the revival in the industry.
Your Company continues its focus on engaging with the key stakeholders in the market and along with its research & development, value addition and technical support. This combined with the Companys investment in additional manufacturing capacity makes it well positioned to ensure customer expectations are fulfilled.
Current & Future Outlook
Manufacturing growth in India remains predominantly in?uenced by domestic consumption and investment trends.
Your Company anticipates that demand for its products will align with the overall economic growth trajectory.
Several factors will shape your Companys future prospects:
To sustain its market position and financial performance, your Company will maintain a proactive approach, collaborating with relevant stakeholders to continuously enhance value propositions.
Risks, Opportunities and Threats
In 2023, your Companys capabilities and skills remained under pressure due to the ongoing Russia- Ukraine con?ict. Despite this challenging environment, your Company strives to fulfill stakeholder expectations by utilizing its expertise in Information Technology, manufacturing, supply chain management, research and development, and financial management, demonstrating its commitment as a responsible market player.
The Management of your Company guided by advice and inputs from your Board of Directors, diligently anticipates and mitigates business risks to the best of its ability.
The measures recommended by the Board are regularly implemented and reviewed to ensure e?ectiveness.
Some of the risks, opportunities and threats as perceived by your Company management at this point of time are mentioned below:
Risks
Opportunities
Threats
Company Performance
The Accounting treatment of your Company in the preparation of financial statements is in consonance with the Indian Accounting Standards 2015(Ind AS) as amended and there is no deviation in the accounting treatment, di?erent from the said Ind AS.
During the year under review, summary of your Companys financial and operational performance as follows:
The Net Working Capital, a key performance indicator, improved due to focus on inventory and receivables management.
Details of signi?cant changes (i.e. change of 25% or more as compared to the immediately preceding ?nancial year) in Key Financial Ratios along with detailed explanations therefor as required vide part B of Schedule V to SEBI (Listing Obligations and Disclosure Requirem3ents) (Amendment) Regulations, 2018:
Ratio | 31 December 2023 |
31 December 2022 |
Variation |
Current ratio (times) | 6.12 | 5.69 | 7.56% |
Return on equity ratio (%) (refer note 1 below) | 20.64% | 17.73% | 16.41% |
Inventory turnover ratio (times) | 5.50 | 5.26 | 4.56% |
Trade receivables turnover ratio (times) | 6.65 | 6.81 | (2.35%) |
Trade payables turnover ratio (times) | 5.15 | 5.73 | (10.12%) |
Net capital turnover ratio (times) | 1.07 | 1.33 | (19.55%) |
Operating profit ratio (%) | 27.10% | 18.49% | 46.57% |
Net profit ratio (%) | 20.19% | 15.17% | 33.09% |
Return on capital employed (%) | 25.54% | 22.34% | 14.32% |
Return on investment (%) | 23.06% | 19.45% | 18.56% |
Notes-
Internal Financial Controls & their Adequacy
Your Company has appointed Mahajan & Aibara as Internal Auditors to oversee and carry out an internal audit of its activities. The audit is based on Internal Audit plan which is reviewed each year in consultation with the Statutory Auditors and Audit Committee. The conduct of the internal audit is oriented towards review of internal controls and risks in your Companys operations such as accounting, finance, procurement, employee engagement, factory operations, travel, its processes etc.
Based on the evaluation, the Audit Committee has concluded that the financial controls of your Company have been adequate and operating e?ectively.
Technical Management and Infrastructure Development
Technical improvements in plant and especially in manufacturing process are ongoing and there has been a continuous importance given to enhance productivity and increase savings in operational costs and also on improved EHS standards. Operational improvements lead to meet the surge in market demand without major CAPEX. Efficient change management, and strong preventive measures ensured that manufacturing operations remained un-interrupted. Company continued to enhance and upgrade infrastructure capabilities across sites.
Following measures were taken at both the production sites: -
All the above measures undertaken have enabled the way for more efficient production and to meet the market demands for new and existing products. Ensured high plant reliability by adopting appropriate maintenance practices and management systems. Focused Preventive Maintenance, Spare parts management, helped manufacturing sites achieve improved reliability and efficiency.
Some Major Projects undertaken, during the year -
Your Company believes that its leadership in the electrical insulations industry is an outcome of its long- standing reputation and relationship with customers along with product quality and the necessary technical services of high standards. Such a reputation has been built over many decades of satisfied customers and your Company works hard to maintain it even today through technological leadership,
understanding the technical needs of the customer, as well as by educating the customers on technological upgradations of our products and thereby creating value for them. This support, over a period, has helped our reputation as a consistent and preferred supplier to our satisfied customers.
Your Company continuously endeavors to maintain its leadership position and technological superiority by continuously focusing on operational excellence and cost e?ectiveness, a fact highlighted by a few examples as mentioned below:
Benchmarking with our overseas affiliates is undertaken to upgrade and improve our technical capabilities. This is done by regular meetings wherein best practices are shared at various forums formed under the stewardship of ALTANA Group and ELANTAS GmbH, Germany. Outcomes of these forums are utilized for product development, optimizing the production processes as well as safety of our plants and products.
Quality, Environment Management and Occupational Health & Safety
Safety, Occupational Health & Environment Protection continue to be accorded the highest priority. Your Company is committed to maintain its operations free from incidents and significant risk to the health & safety of its stakeholders through improved engineering practices, constant communication, safety awareness, robust checking systems and sound training practices and through audits.
Your Company already holds accreditations for its Quality Management System (ISO 9001:2015), Environment Management System (ISO 14001:2018) and Occupational Health & Safety Management System (ISO 45001:2018). The IMS was audited by T?V NORD and your Company successfully completed the Re-Certification audit in 2022 at the Manufacturing sites in Ankleshwar & Pimpri as well as Corporate office.
Your Company is devoted towards achieving its sustainability goals. In line with ALTANA vision of being CO2 neutral by 2025 and fossil free by 2040, your Company has prepared a roadmap and currently evaluating on several initiatives. Your Company uses solar power for Corporate & R&D buildings. Some actions are planned like solar energy at Ankleshwar with some smaller projects towards sustainable operations. By making continuous e?orts to lower e?uent loads, reduce consumption of energy and water, reduce usage of toxic materials, lower emission of VOCs, and greening its factory sites, your Company continues to re-affirm its commitment to Sustainable Development
Research & Development
Your Company has continued to focus on developing capabilities in new and di?erent areas such as continuous product development, cost saving through formula management and process upgradation. New and continuing e?orts have been focused in these areas and for growth into new markets.
Your Companys active participation in ALTANAs global R&D initiatives also allows it to have ready access to recent technological developments in the processing, application and end use of insulation
products. The participation of your Company has grown this year, with two new approved global projects (by the Technical Steering Committee) exhibiting strong progress through the year.
The Market Technology & Development Department (MTD) developmental activity across all businesses is showing enhanced responsiveness, with a variety of products developed and launched in the last year for automotive, electrical and electronics market segment. Strengthened the product base and customer base through addressing new opportunities and maintaining a healthy balance of low volume-high value specialty products.
The Research and MTD teams are engaged in a wide range of activities aimed at maintaining a technological edge, providing e?ective solutions to the customers, improving internal productivity through process improvements and by using alternative raw materials.
Human Resource/ Industrial Relations
Your Companys Industrial Relations at both locations were peaceful and harmonious throughout the year. The year ended with 184 on roll employees.
As your Company continues to look at ways of sustaining growth, the human resources team continued to look at upskilling its employees across all the levels. This was enhanced by introduction and upgrade of Learning Management System which introduces employees to many online/e-learning modules for Self-Development. Employees used these trainings for enhancing their learning.
Your Company continues to deploy new tools which make the onboarding and management of talent more e?ective. At the same time it is progressing on the key action areas that emerged from the global
Your Companys HR and IR policy will continue to constantly evaluate the needs of its talent pool and take appropriate action to ensure that their contributions sustain the growth.
Cautionary Statement
Statements in the Management Discussion and Analysis Report describing your Companys objectives, projections, estimates, expectations may be interpreted as "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could di?er from those expressed or implied. Important factors that could make a di?erence to Companys operations include economic conditions a?ecting demand / supply, price conditions in the domestic and overseas markets in which your Company operates, changes in Government regulations, tax laws and other statutes.
For and on behalf of the Board
Place: Mumbai
Date: 20? February, 2024
Regd. Office: 147, Mumbai Pune Road, Pimpri, Pune 411018
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