Steel is one of the most important and widely used materials in the world. It is used
in construction, transportation, manufacturing, and many other industries. The steel
sector is not only vital to the global economy but also plays a critical role in the
economic growth of any country. The industrys impact on the economy goes beyond its
direct contributions to GDP. The production and consumption of steel have a significant
multiplier effect on other sectors of the economy like infrastructure, transportation,
automobiles etc. Steel is also an essential material for the energy sector, as it is used
in the production of wind turbines and oil rigs. Furthermore, the steel industry is a key
player in international trade.
India is the second-largest producer of steel in the world, after China. The demand for
steel in India has been robust in the last one year, driven by the governments
infrastructure projects and the support extended to the manufacturing sector. The
stainless steel market in India has also witnessed growth in the last one year. The demand
for stainless steel has been driven by the construction, automotive, and consumer goods
industries. The growing awareness of the benefits of using stainless steel, such as
durability and corrosion resistance, has also contributed to the growth of the market.
However, the industry has also faced some challenges such as the shortage of raw
materials, ongoing war between Russia and Ukraine, effect of the COVID-19 pandemic on the
global supply chain etc. But despite these roadblocks, the steel manufacturing sector has
been striving hard to ensure its growth and India is one of the few countries where
maximum new capacity both by way of greenfield and brownfield initiatives is in the
pipeline.
The Global Economy
The global economy has been on a rollercoaster ride in recent times, driven by the
effect of COVID-19 pandemic and a range of other factors. As we look ahead to the global
economy in the year 2023-24, there are several factors that are likely to shape economic
growth and business conditions. The January 2023 World Economic Outlook Update projects
that global growth will rise to 3.1 percent in 2024. Global inflation has been more
persistent than previously assumed, and high core inflation suggests that inflation may
remain above pre-pandemic averages in many countries for an extended period. To rein in
high inflation bolster credibility, major central banks have tightened their policy.
Aggressive monetary policy tightening to contain high inflation, deteriorating financial
conditions, declining confidence, and widespread energy shortages have contributed to a
downgrade global growth.
The Indian Economy
Indias steel production reached a record high of 121.06 million tonnes in the
financial year 2022-23, up 10.4% from the previous year. The sector also benefited from
the governments focus on infrastructure development, increased demand from the automobile
and construction sectors. Though we saw a strong growth curve in the domestic market but
on the export front, Indian manufacturers did see a decline. India, the worlds
second-biggest producer of crude steel, shipped around 6.7 million tonnes of finished
steel in 2022-23, which was a decline of around 50.2% from the year 2021-22 and the lowest
since the period of 2018-19. Meanwhile, Indias imports touched a four-year high at 6
million tonnes in 2022-23, a growth of 29% from the year 2021-22 and the highest since
2019-20.
The volatility in the market was mainly the effect of several causes which contributed
in their own ways like the Russia-Ukraine war which resulted in the global slowdown in
demand and second was the export tax imposed by the government in the month of November
2022 that capped export opportunities for Indian steelmakers. In addition, a lack of
appetite from Southeast Asian counties also affected steel exports. Overall, Indias crude
steel production reached a record high in the year 2022-23. Surprisingly, India was the
only country among worlds top 10 steel-producing countries that saw a positive growth in
crude steel output in 2022.
Regarding the economic development of the nation, IMF has projected the GDP growth of
India at 5.9% compared to the projection of 6.5% by the Reserve Bank of India. Amidst the
given circumstances and the economic scenario around the country, we are hopeful that
India has a high chance of becoming the epicentre of the growth of steel in the world.
Growing strength to strength in the last 9 years, our country is on course to achieve two
great landmarks i.e. production of 125 Million tonnes of steel and achieving 11%-12%
growth in steel consumption in the time ahead.
Companys performance
The Financial Year 2022- 23 has been an outstanding year in the history of your Company
in many ways. The Company registered the highest dispatch in the year ended on 31st March
2023. The total revenue of the Company for the Financial Year 2022- 23 stood at Rs. 5,597
crore as against Rs. 4,607 crore in the previous year, placing your Company among the top
league of Rs. 5,000+ crore turnover companies in the private sector of India. The Profit
After Tax for the year under report stood at Rs. 185.48 crore as against Rs. 91.62 crore
in the previous year. The net debt equity ratio of the Company as on March 31, 2023 stood
at 1.49. FY 23 marked an increase of 10% in the total steel production of your Company as
against the previous year. The Steel Division revenue increased by 21%. Revenue from the
Industrial Machinery division stood at Rs. 138 crore as against Rs. 106 crore of the
previous year. In the last year, our industrial machinery division has secured the
contract to design and manufacture a crane for DGNP, Vizag. The crane has distinction of
being Indias heaviest by weight and largest by span, indigenously designed and
manufactured EOT Crane. This is a significant milestone for our company, and we are proud
to have been selected for such a prestigious project.
Your company shall continue to focus on increasing efficiency, improving quality, and
increasing its output in the year ahead. In the last year, your company had executed an
Agreement for Sale of the surplus land at Kalwe and Dighe, in Thane district subject to
certain terms and conditions. During the year under report, sales consideration of Rs
796.46 crore has been received by Company towards transfer of 45.94 acres land to the
buyer. A major portion of sales consideration amount is utilized for reducing debt.
Performance of Our Steel Division
Steel division of your company has had a commendable performance in the first three
quarters of the year 2022-23 but witnessed a slight decline in performance towards the
last quarter, mainly because of the disturbance created across some of the largest
economies in the world. However, the company would like to state that despite the
challenges posed by the pandemic and the supply chain disruptions due to the war, the
division has continued to meet customer demand for high-quality stainless steel and alloy
steel products. Our sales figures have shown a steady increase, and we have been able to
maintain our market share in the face of intense competition. In the last year, your
company witnessed an increase in 21% in the production of Stainless Steel and 6% in the
production of Alloy Steel, compared to the previous year.
One of the key factors contributing to the success of our steel division has been our
focus on innovation and efficiency. We have invested in cutting-edge technology and
modernized our production processes to ensure that our products are of the highest quality
and are produced with minimal waste. This has enabled us to reduce our operating costs,
which has in turn allowed us to offer our customers competitive pricing.
Our production processes have become more streamlined, and we have implemented
efficient supply chain management practices to ensure timely delivery of our products. As
a result, we have been able to meet the growing demand for steel in the market and
strengthen our position as one of the leading steel manufacturers in India. The increase
in our steel production has not only allowed us to cater to our existing customers but
also to explore new business opportunities and expand our market reach. We are proud of
this accomplishment and remain committed to sustaining this growth trajectory in the
future.
Looking ahead, we are confident that our steel division will continue to perform well
in the coming year. We will continue to prioritize innovation and efficiency, and we will
explore new markets and expand our product offerings to drive growth. We remain committed
to providing our customers with the highest quality steel products and exceptional
service, and we are confident that our strong performance will continue to position us as
a leader in the industry.
Performance of Our Industrial Machinery Division
Your company is pleased to report that the industrial machinery building division has
been performing exceptionally well over the past year. The division has been able to
capitalize on the infrastructure growth that is taking place across the country, and this
has been a significant driver of its success. Additionally, the division has been
proactively exploring new industries where our products can be used, which has enabled us
to tap into previously untapped markets. We have been able to leverage our expertise and
technological capabilities to offer innovative solutions to our clients in these
industries, and this has been a key factor in our success. We are confident that the
division will continue to perform well, and we are committed to investing in its growth
and development to ensure that it remains at the forefront of the industry.
Our People are our strengths
As a steel manufacturing company, we understand the importance of having a skilled and
motivated workforce to achieve our business objectives. Over the past year, we have
significantly increased our focus on employee training and skill enhancement programs to
better equip our employees with the tools and knowledge they need to succeed. We have
invested in various training initiatives, including leadership development programs,
technical skills training, and safety training, among others. These programs have been
designed to enhance our employees capabilities, boost their confidence, and promote a
culture of continuous learning and improvement. We firmly believe that our employees are
our most valuable asset, and we are committed to investing in their growth and development
to achieve our long-term business goals.
Our CSR Activity update
Corporate Social Responsibility (CSR) is an important aspect of modern-day business
practices and at Mukand we are committed to giving back to society. Our Corporate Social
Responsibility programmes are mainly focused at education improvement and providing a
healthy and happy learning environment to the school kids. We believe that access to
quality education is a fundamental right of every child, and we are committed to doing our
part in improving the education standard of students in our community. Our mathematics
classes are just one of the many initiatives that we have undertaken as a part of our CSR
activities, and we are proud to have made a positive impact in the lives of these young
students. The mathematics classes have been designed to provide personalized attention to
each student, with a focus on developing their problem-solving skills and strengthening
their foundational understanding of the subject. The classes have been well-received by
the students and their parents. These classes are aimed at helping students cover for the
loss of education they experienced during the COVID pandemic. As part of our ethos of
promoting sports at the school level, your company organized its Third Annual Road Race
for the School Students at Shahpur. The event saw the participation of more than 850
students from 43 schools in and around Shahpur. The Road Race was followed by felicitation
of the winners and cultural performances by the students. The programme also saw wonderful
dance performances by the school kids combining traditional dance forms with contemporary
ones and offered a visual treat to the audience. Your company aims to promote physical
fitness and sportsmanship among the children. Overall, our Annual Road Race is an
important event that serves multiple purposes. It not only promotes physical fitness and
sportsmanship among children but also provides a platform for cultural exchange and
creativity. We are proud to be associated with this initiative and are committed to
continuing our efforts in creating opportunities for children to grow and develop.
On behalf of the Board of Directors
Niraj Bajaj
Chairman & Managing Director
DIN : 00028261
Mumbai, May 16, 2023
+91-9892691696
