Sahyadri Industries Ltd Management Discussions.


Global growth is projected to rise from an estimated 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent for 2021 —a downward revision of 0.1 percentage point for 2019 and 2020 and 0.2 for 2021 compared to those in the October World Economic Outlook (WEO). The downward revision primarily reflects negative surprises to economic activity in a few emerging market economies, notably India, which led to a reassessment of growth prospects over the next two years. In a few cases, this reassessment also reflects the impact of increased social unrest.

While there is no way to tell exactly what the economic damage from the global COVID-19 novel corona virus pandemic will be, there is widespread agreement among economists that it will have severe negative impacts on the global economy. Early estimates predicated that, should the virus become a global pandemic, most major economies will lose at least 2.4 percent of the value their gross domestic product (GDP) over 2020, leading economists to already reduce their 2020 forecasts of global economic growth down from around 3.0 percent to 2.4 percent. To put this number in perspective, global GDP was estimated at around 86.6 trillion U.S. dollars in 2019 - meaning that just a 0.4 percent drop in economic growth amounts to almost 3.5 trillion U.S. dollars in lost economic output. The International Monetary Fund (IMF) has revised its global GDP growth estimate from 3.3% just 3 months ago to a contraction of 3%, something not seen since the Great Depression of the 1930s.

[Source: World Economic Outlook, January 2020 and www.statistica .com]


The economic impact of the 2020 corona virus pandemic in India has been largely disruptive. Indias growth in the fourth quarter of the fiscal year 2020 went down to 3.1% according to the Ministry of Statistics. The Chief Economic Adviser to the Government of India said that this drop is mainly due to the corona virus pandemic effect on the Indian economy. Notably India had also been witnessing a pre-pandemic slowdown, and according to the World Bank, the current pandemic has “magnified pre-existing risks to Indias economic outlook”.

The World Bank and rating agencies had initially revised Indias growth for FY202I with the lowest figures India has seen in three decades since Indias economic liberalization in the 1990s. However after the announcement of the economic package in mid-May, Indias GDP estimates were downgraded even more to negative figures, signaling a deep recession. (The ratings of over 30 countries have been downgraded during this period.) On 26 May, CRISIL announced that this will perhaps be Indias worst recession since independence. State Bank of India research estimates a contraction of over 40% in the GDP in QI FY2I. The contraction will not be uniform, rather it will differ according to various parameters such as state and sector.

On 12 May the Prime Minister announced an overall economic package worth Rs. 20 Lakh crore (US$280 billion), 10% of Indias GDP with emphasis on India as a self-reliant nation.


Roofing is major part of building material industry. Roofing sheet industry is dominated by RCC sheets more than 50% as per an estimate. Rest comprises of GI sheet, clay tiles and cement roofing sheets. Cement fiber sheet comprises around 10% of the total roofing market.

Indian roofing industry has been evolving at a rapid pace in recent time. The entry of several new innovative technologies and concept has dramatically changed this dynamic industry. One of the major reasons for the significant growth in roofing solutions is the rapid change in urbanization patterns.

This industry includes organized and unorganized players. Cement fibre sheet is rust free, termite free, fire retardant, good insulation, good acoustic rating has lifelong span of life.

Cement fibre sheet boards and panels are becoming popular due to increasing health-consciousness and the rising cost of wood or wooden products. Besides, these boards are eco-friendly and their application promotes a chemical-free hygienic environment. The other major drivers of their use comprise the need for speed, preference for dry construction, relative difficulty in accessing sand and water at construction sites and a dearth of skilled masons, among others.


With growth in disposable income, first choice after thatched roof is asbestos cement sheet. It is cheapest option among all the roofing solutions besides having advantage of being rust free, termite free, fire retardant, and long life span. Government has been generous in allocating budget for rural development and eradicating poverty. With liquidity in the market, prospects are good.

Your Company has sufficient capacity for flat board and therefore is fully equipped to tap the emerging market for partitions, mezzanine floors, facades, doors, toilets etc.

We expect steady generation of power from windmills which will result into steady income for your company.


The exchange rate fluctuations, increase in cost of power, transport, and raw material, inadequate monsoon are major concern to the industry.

The sales of roofing sheets are highly dependent on rural prosperity as the use of these sheets is highest in rural and semi-urban areas. However, good monsoon in 2019 resulted into increase in earning of the customers from rural area.

Any government initiative to completely ban or restrict the use of Fibre Cement will force industry to look for alternative and may increase its overall cost.

India only uses Chrysotile fiber which is not as harmful as blue asbestos. Cement sheet industry is fully aware of these threats and keep educating public as also key authorities about safe manufacturing process of asbestos Continuing R&D and innovations are the key factor in keeping us competitive vis a vis competing products.

Indian cement sheet industry is major customer of international asbestos suppliers, therefore viability of cement sheets always is a concern of suppliers and it keeps prices at viable level. Presence of key government authorities like Competition Commission ensures check on abnormal fluctuation in cement prices.

As far as windmill are concerned, timely payment against sale of power is a continuing problem. Changing policies of government is another hurdle.


Overall the year has been satisfactory. First quarter was positive. However there was pressure in second and third quarter due to general slowdown and rising cement prices and fourth was impacted due to pandemic COVID 19 and Nationwide Lockdown. The positive factor is that company is performing well due to cost cutting measures, checks and controls implemented.


Rural demand is showing signs of supporting Indias economy, seeing bumper crops, a favorable monsoon and government handouts helping villages outpace recovery in urban areas. According to Some high-frequency indicators such as tractor, two-wheeler and fertilizer sales show villages are performing much better than towns and cities. Few months back Government has announced 21 trillion-rupee worth of measures to support households and businesses offset the economic loss from the Covid-19 shutdown, however it looks like worlds largest lockdown is set to push the economy toward its first contraction in more than four decades this year.

Further we would like to add that, demand for roofing business has revived with migrants coming back to villages. Cash availability in the rural belts has improved due to various government incentives. Also, cash collection from rural areas has improved since dealers are paying in advance.


We analyze performance in two segments - building material and windmill. Building material top line has drop down by 2.73 % where as windmill power generation improved by 10.75%.


Major raw material i.e. cement is prone seasonal price variations. However excess cement manufacturing capacity vis a vis demand partly protects from possible losses.

Our key raw material i.e. asbestos is imported. Landing cost depends upon dollar rate. However cement sheet industry is major customer of asbestos industry. Therefore asbestos industry always understands this constraint and its implication. Annual prices of asbestos are generally fixed keeping dollar rate too in view.


Operational performance of the Company for the Year 2019-20 is explained in detail in Board of Directors report of the Company


The Company has more than 500 employees as on 31 -03-2020. Industrial relations in all the Units continue to be cordial and healthy. Employees at all levels are extending full support and are actively participating in the various programmes for energy conservation and cost reduction.


In accordance with Section 134(5) (e) of the Companies Act, 2013, the Company has Internal Financial Controls by means of Policies and Procedures commensurate with the size & nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5) (viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements.


Financial Ratios 2019-20 2018-19 % Change Reason for Change
1 Debtors Turnover Ratio 8.21 8.62 (4.71) -
2 Inventory Turnover Ratio 3.97 4.23 (6.24) -
3 Interest Coverage Ratio 6.18 7.18 (13.98) Due to repayment of debts
4 Current Ratio 2.29 2.14 7.24 Increase in Investment
5 Operating Profit Margin 17.40 24.03 (27.58) -


During the financial year 2019-20, Net worth of Sahyadri Industries Limited was Rs 18,502.94 Lakh as compared to Rs. 16,267.31 Lakh in the previous year a growth of 13.74% due to increase in profit of the company by Rs 2,639.07 Lakh (including Final Dividend of FY 2018-19 and Interim Dividend of FY 2019-20 and DDT Rs. 403.45 Lakh)