Stylam Industries Ltd Management Discussions.

Companys Performance

Financial Year 2018-19 was a good year for Company, wherein Company executed well on its strategic roadmap and delivered a strong financial performance.

The financial year was filled with external vulnerabilifies arising out of rising oil prices, trade wars between major global trading partners and US monetary tightening, but India outshined as the worlds fastest growing large economy majorly led by a robust consumption story. However, the GDP growth moderated primarily due to subdued rural demand towards the second half of the year coupled with liquidity issues. While consumer senfiments were moderated, the long term consumpfion story remains intact.

Global Economy

Following upswing in last two decades global economy declined to of 3.6% in 2018. Though first half of 2018 witnessed strong growth at 3.8%, but the second half saw a decelerafion in global economic acfivity.

During the second half of the year, however, the global economy lost some momentum, mainly on account of the increased trade fricfions between the US and China, and the fightening of financial condifions. Internafional Monetary Fund (IMF) expects growth to decelerate to 3.3% in 2019 and its projecfions suggest that all three major engines of the global economy, viz. US, China and Euro area are likely to decelerate in 2019. On the posifive side, however, IMF expects world economic output to recover and grow at 3.6% in 2020.

Growth in India was 7.1%, primarily due to growth in construction sector (8.9%) and manufacturing sector (8.1%). The Gross fixed capital formation is estimated to have increased by 10%, thereby contributing to 32.3% of GDP.

Overall, increasing trade tensions took a toll on business confidence, worsening financial market sentiments. Also, tightening financial conditions for vulnerable emerging markets in early 2018 and for advanced economies later in the year showed its impact on global demand, leading to a slowdown in global economic growth.

Europe: growth in the Eurozone slowed down due to the high deficit concerns in Italy and political uncertainties around Brexit.

Asia:Nepal witnessed a slowdown in construction activity.

Middle East: conditions remained poor across the region and housing/construction remained dull. The UAE introduced VAT for the first time in January 2018 further aggravating the poor conditions. Bahrain followed suit by introducing VAT in January 2019 Ethiopia, Syria, Iran: currency restriction Egypt: economic downturn


According to the International Monetary Fund (IMF), global economic growth is expected to further decline to 3.3% in 2019 but return to 3.6% in 2020. While the slow paced growth in the second half of 2018 is likely to continue in the first half of 2019, growth in the second half of 2019 is expected to gain momentum, owing to an ongoing build-up of policy stimulus in China, improvements in global financial market sentiment, waning of some temporary drags on growth in the euro area, and a gradual stabilization of conditions in stressed emerging market economies. Improved momentum for emerging market and developing economies is projected to continue into 2020, primarily reflecting developments in economies currently experiencing macroeconomic distress.

Growth in advanced economies is expected to slow down from 2.2% in 2018 to 1.8% in 2019 to 1.7% in 2020. The United States is expected to grow at a slower pace of 2.3% in 2019, down to a further 1.9% in 2020 as the impact of the fiscal stimulus fades. Growth in the Euro area is expected to decline to 1.3% in 2019 as the effect of the weakness in 2018 is likely to carry forward to the first half of 2019. Chinas economic growth is expected to be at 6.3% in 2019 due to lingering impact of trade tensions with the US.

Indian Economy

Indian economy exhibited mixed record in the just concluded fiscal. GDP growth slowed from 7.2% in FY18 to 6.8% in FY19. Sub-par rainfall in 2018, tight financial conditions faced by the nonbanking financial sector and moderation of external demand were the key challenges faced by the economy. Consumption growth declined during the second half of the year, but there were some signs of revival in the investment cycle, as the rate of gross fixed capital formation improved from 31.4% of GDP in FY18 to 32.3% in FY19.

Macroeconomic stability indicators broadly maintained their health. Low inflation has created the space for monetary policy easing, which will also help support growth revival. The fiscal deficit target for FY19 was adhered to, despite a shortfall in tax revenues. While the current account deficit was high at 2.6% of GDP during the first three quarters of FY19, the softness in international oil prices portends its narrowing in the coming quarters. Following the resounding political mandate for the ruling Government, expectations of further economic reforms and impetus to large infrastructure investments have been reinforced. These are reflected in strong inflows in the capital market, taking equity indices to record levels in the weeks following the general elections.

The Indian currency saw a significant depreciation, falling to lows of 74.3 per USD mark mid-year before recovering. The last month of FY2018-19 saw the Rupee recover sharply to 68-69 per USD range on the back of renewed portfolio inflows as well as revised views on a likely long pause from the US Fed on its interest rates.


Indias medium-term growth prospects continue to be robust and is expected to grow at about 7.3% in 2019 and further by 7.5% in 2020, supported by the continued recovery of investment and robust consumption amid a more expansionary stance of monetary policy and some expected impetus from fiscal policy. Significant reforms undertaken in the recent years such as GST and insolvency code would raise Indias growth potential in the coming years, amplifying the effect of the long-term structural cornerstones of the Indian growth story such as demography and urbanization. In the near-term, however, uncertainty over the forthcoming monsoon season and the heightened global risks present headwinds for FY20. Accordingly, the outlook for the Indian economy in FY20 is one of cautious optimism at this juncture.

Laminate Industry

In terms of volume, the global decorative laminates market is pegged at 10,814 Mn Sq. Meter in 2017 and is expected to reach 15,645 Mn Sq. Meter by 2025 end. The market is slated to expand at a CAGR of 4.7% in terms of volume over the forecast period. Global sales of decorative laminate is estimated to be valued at US$ 64,515.6 Mn in 2017 and is projected to increase at a CAGR of 5.1% over the forecast period to be valued at US$ 95,877.8 Mn by 2025.


The global Decorative Laminates Market is expected to display higher growth rate over the next seven years. The market is subject to witness a substantial growth due to the growing construction activities, rapid urbanization, increasing population and growing infrastructural spending by both developing and developed economies across the globe. Growing constructional activities like in shopping malls and business parks the developing economies across the Asia Pacific region such as India, China, Malaysia, Thailand and Singapore are expected drive the growth of decorative laminates market in the upcoming years.

Growing demand of decorative laminates from housing market is credited to booming buildings & construction industry, thus driving market growth over the forecast period. Additionally, increasing benefits of decorative laminates over traditional materials such as metal, wood, and plastic are expected to fuel the growth of the market in upcoming years. Globally, the market is predicted to generate massive revenue over next seven years, providing numerous opportunities for market players to invest for research and development in the decorative laminates market.

Increasing demand for decorative laminates from building & construction industry owing to benefits associated with its use such as higher durability and attracfive appearances of the surfaces are expected to influence market growth over the forecast period. Addifionally, decorafive laminates also provide protecfion against harsh weather and external environmental factors such as ultra-violet radiafion, high temperatures, acid rain, and pollufion parficles. These factors are predicted to boost market demand for decorafive laminates during this period.

The market is broadly categorized into two major segments based on the applicafion type such as residential sector and non-residenfial sector. The non-residenfial sector is considered as one of the fastest growing segment in the market with substanfial revenue generafion in the last few years. Growing popularity of decorafive laminates in the non-residenfial segment is attributed to the increasing demand from restaurants, laboratories, educafional insfitutes, office furniture, hospital, hotels, and retail shops. The residenfial segment has also witnessed substanfial growth owing to the improved living standards and rising per capita income.

The market is divided by region as North America, Europe, Asia-Pacific, Latin America and Africa. North America has shown major growth in recent years owing to the rise in the implementation of latest technologies home decor industry, increase in the number of research & development acfivifies in the region and existence of well-established industrial infrastructure.

Asia-Pacific region is predicted to hold major market share in the decorafive laminates market with massive growth in forecast period. Countries such as India, China and Singapore are leading the Asia-Pacific market with robust growth home decor industry, increasing building & construcfion acfivifies, rising per capita income, improved living standards, and significant investment by leading industry players considering potenfial growth opportunities in the region.

Furniture and cabinets applicafion segment is esfimated to gain 210 BPS by 2025 By applicafion, the furniture & cabinets segment is esfimated to dominate the global decorafive laminates market and is expected to create total incremental dollar opportunity of US$ 20,629.2 Mn between 2017 and 2025. In terms of value, the furniture & cabinets segment is expected to gain 210 BPS in 2025 as compared to 2017 and is expected to expand at a CAGR of 5.5% during this period.


Company has two manufacturing units at Panckhula with producfion cumulafive capacity of 11Mn sheets per annum at the close of Financial Year 2018-19.

The company inifiated expansion by puffing one more press line to enhance its cumulafive capacity to 14.3Mn sheet per annum.


All our expansion plans are progressing as per planned and are scheduled for complefions by second half of financial year 2019-20.

Business Consolidation

To consolidate all business vertical related with Building Materials, under flagship of Stylam, the company had filed application for amalgamation of Golden Chem-tech Limited with Stylam with Honble NCLT, Chandigarh Bench.

Property Held for Sale- IT/ BPO Building

The Company, had planned to diversify into IT/BPO Sector in the year 2012-13 and purchased land ad-measuing 5573sq mtr in Panchkula Technology Park in Haryana, India, conceptual design of the building, named as Stylam Tower, was designed by well-known architect RSP Designs. However, with the expansion in the laminate business and the strategy going forward to concentrate on its core business related with Building Materials, the Company endeavors to sell-off the tower. The property has been quoted at market value and categorized as Investment Property. The proceeds when realized will be used for reduction of long term borrowings.