The Indian economy sharply bounced back in FY 2021-22, with robust GDP growth of 8.7% after 6.6% contraction reported in the previous year due to restrictions and lockdowns imposed by the Government to control the spread of COVID-19 pandemic. Government expenditure and domestic spending has supported the economy, complemented by a long-term focused growth oriented budget. The initiatives undertaken by the Government in the recent past, such as the commodity-intensive National Infrastructure Pipeline (NIP) and Production Linked Incentive (PLI) scheme to boost local manufacturing, will play a big role in making India a manufacturing hub for global majors. This is encouraging, and such bold and scalable programmes are instrumental in realising the vision of a self-reliant India.Indian chemical industry performance
According to CRISIL, the Indian Speciality chemicals industry will outpace its Chinese counterpart and double its share of the global market to ~6% by 2026 from 3-4% in fiscal 2021. This will drive a strong revenue growth of 18-20% this fiscal and 14-15% in the next fiscal, compared to single-digit growth reported in the previous two fiscals.
The chemical industry across the globe is undergoing a strategic shift in supply chain from China to other countries including India. This presents huge opportunity for India to showcase their expertise and become a global hub for chemical manufacturing. China emerged as a global manufacturing giant in recent decades. Since 2000, its chemical production capacity has increased eightfold. However, in recent years, capacity reductions as a result of increasing environmental compliance of chemical facilities, a trade war with the US, and, most recently, COVID-19 crisis-led lockdowns and Russia-Ukraine war have led companies to adopt a China+1 strategy. With supply chain disruption and uncertainty in China, global players are looking to diversify their sourcing, and India provides strong alternatives with similar scale, technology, raw materials, and supportive Government policies.… The year in perspective
We continued to be agile to the changing needs and preferences of our customers and delivered specialised solutions to stay ahead of the curve. While doing so, we prudently deployed capital to elevate our market position in the chosen chemistries. Despite a challenging macro-economic backdrop, we demonstrated immense resilience to continue our operations uninterrupted, while fulfilling the supply commitments of customers. We undertook several enhancements in the product mix, improved realisations and cost reduction efforts which helped deliver better margin profile. Overall, we achieved highest-ever revenue and profitability during FY 2021-22 despite all odds. Premised on strong earnings performance, the Board of Directors recommended a dividend of ₹ 7 per equity share, i.e., 350% of face value of ₹ 2 each for FY 2021-22 towards rewarding its shareholders.
At Deepak Nitrite, R&D forms a cornerstone for growth, and we consistently build our capabilities and competencies in process research, product innovation, intellectual property, and analytical references to provide integrated solutions for our customers. We are making sizeable investment in R&D to build in-house capability to create a pipeline of products that will drive future growth. Deepak Research and Development Centre (DRDC) has enabled us to file applications for 36 patents cumulatively and develop innovative and advanced intermediates that drive our portfolio expansion.
Our people are our most valuable asset, and their domain knowledge and experience provide us with a significant competitive advantage. Our experienced professionals are crucial to our ambition to become a global leader in our business. The Company comprises committed and motivated employees because we have developed a motivating work culture and priortised the health of our employees through regular health check-ups and safe work practices. We are committed to high standards of ESG practice and our operations are aligned to Responsible Care practices.
Access to basic health services is a challenge in villages and economically challenged areas in India. As a responsible corporate citizen, Deepak Group extends support to the residents of these villages and rural areas by providing primary healthcare services. We have launched 4 Mobile Health Units that provide health care services in 133 villages around Dahej and Dugdha in Gujarat and Taloja and Roha in Maharashtra. We have impacted around 1,70,000 lives through our CSR initatives, in FY 2021-22.Outlook
Looking ahead, we will continue the next phase of our growth journey by strengthening the quality of customer engagement, sharpening existing strong procurement and logistics practices, enhancing safety and sustainability efforts and nurturing a progressive work culture. Our planned foray into advanced solvents, various upstream and downstream products and adding new chemistry platforms is a step in the right direction to diversify our product portfolio, widen the customer base, and increase the value-addition across the portfolio. All this will fortify our business proposition, while elevating our leadership position across chosen chemistries. We will continue to be a partner of choice for leading Indian and global conglomerates by leveraging deep chemistry expertise and robust manufacturing set-up.
I would like to extend my heartfelt gratitude to all our stakeholders and shareholders for their untiring support that helped us beat the industry standards and set new benchmarks. I look forward to a bright future in the years to come.
DEEPAK C. MEHTA
Chairman & Managing Director