A reflection of inherent strength
I sincerely hope that you and your loved ones are safe and healthy. The year gone by has been full of hardships in the wake of the pandemic, but we continued to support our teams and engage with our customers to protect our business model and the interests of all our investors, shareholders and all other stakeholders.
FY 2020-21 saw one of the world's worst humanitarian crisis inflicted by the pandemic. The Indian economy also faced a severe headwind and the GDP contracted by 7.30% during the year. The drop was largely due to a sharp 15.70% decline during the first half of the year though there was a decent recovery during the second half.
Apart from the agriculture sector, most of the other sectors witnessed steep decline during April to September 2020. Increased uncertainty, loss of incomes, curtailment of spending led to contraction of demand. Supply chains were also disrupted due to lockdowns and other restrictions. The fiscal stimulus of the Government of India and monetary policies of the RBI provided the much-needed liquidity in the system to ramp up economic activities. Rural demand remained resilient following good monsoon and various support measures undertaken to combat the pandemic. However, it would take a while before the economy can regain its momentum. Unfortunately, the second surge of the pandemic post April 2021 has adversely impacted the healthcare infrastructure and economic activities were also jeopardised.
Intrinsic part of millions of homes
Our business was also impacted owing to the pandemic, but our brand continues to be preferred in India enabling us to retain our market share. We continue to leverage our wide and deep distribution network with an expanding range of product offerings in lighting and electrical segments.
Year under review
Our revenue from operations also grew marginally by 3.20% to Rs. 1,236.94 Crores in FY 2020-21 as compared to Rs. 1,198.15 Crores in FY 2019-20. I am delighted to report the highest ever operating profit in the history of our operation, amidst one of the most operationally challenging years the world has ever faced. Our Profit Before Exceptional Item and Tax more than doubled to Rs. 149.64 Crores as compared to Rs. 68.48 Crores the previous year on the back of our persistent emphasis on increasing operating efficiencies.
Our Profit After Tax was negative to the tune of Rs. 309.13 Crores against a profit of Rs. 179.57 Crores in the last fiscal on account of exceptional adjustments worth Rs. 629.70 Crores, as detailed in the financial statements later in this Report. These adjustments are non-cash items and have no impact on the operations of the Company. During the year our cash flow from operations (after exceptional items) grew by 80% to Rs. 223.49 Crores from Rs. 124.13 Crores last year.
Our robust margins were on the back of an optimal turnover mix and focus on maintaining strong revenue share of the more profitable segments. This, coupled with lower overheads due to restricted operational environment, distribution cost, and promotional spends further enabled a sustained enhanced margin. We expect to continue maintaining our margins at this current level going forward, leveraging on a strong product mix and converging our resources on increasing efficiencies.
Further, we will also be focusing on reducing our debt levels and taking all necessary steps to make our balance sheet debt free. In concurrence with this, we have already refinanced our high-cost debts at lower rates, strategically enabling us to lower our interest burden and stress on our balance sheet.
Improving efficiencies in batteries
The vertical saw a 10% increase in turnover at Rs. 800.90 Crores, primarily due to a growth of 6% in volume. Robust demand growth coupled with continued restriction on Chinese import dumps post the BIS standard implementation aided the progress. Our EBIDTA was Rs. 207.40 Crores, and we reached another milestone in batteries recording the highest ever EBIDTA margin at 25.90% compared to previous year's 21.10%. This feat was achieved on the back of continued favourable commodity prices, fiscal benefits from the manufacturing unit at Assam, overall cost conservation and lower overheads abating impact of unfavourable currency movement.
Robust performance in flashlights
Our flashlight segment which had seen some pressure in the previous year bounced back strongly recording an 8% to record a revenue of Rs. 179.10 Crores. This was despite not only an unprecedented health and economic crisis leading to muted demand but also increasing competition from the unorganised and replica market. We are persistently launching new and innovative models to counteract and reduce counterfeiting of our products. On the margins front also the vertical showed encouraging progress with EBIDTA of Rs. 39.10 Crores and an EBIDTA margin of 21 .80% as compared to 15 .70% in the previous year.
Looking brighter for lighting and electricals
The pandemic-led restrictions severely impacted the vertical with revenues de-growing by 7% to Rs. 221.10 Crores during FY 2020-21. In spite of reduced economies of scale, the vertical registered an EBIDTA of Rs. 9.20 Crores as compared to the EBIDTA loss of Rs. 18.83 Crores recorded last year, becoming EBIDTA positive for the first time . The business has started creating a name for itself in the market and we believe that we too will be able to create a mark for ourselves similar to that of in the battery and flashlight business. As a natural extension of our core offering we continue to add new products to our portfolio to the segment providing an extensive and comprehensive range of products to our customers. We remain confident about the growth prospects of the segment, buoyed by strong demographic and macro-economic factors.
Growing prominence in small home appliances
Leveraging our brand expertise and strong distribution network we entered into the small home appliances vertical a few years back. We faced some headwinds in the segment, with turnover dropping to Rs. 51.80 Crores against Rs. 61.50 Crores in the previous year. This was largely due to curbed non-essential purchases in key products and supply constraints caused by the pandemic. Currently, in the gestation period, the vertical is still in the red registering negative EBIDTA of Rs. 15.10 Crores. As we consolidate our position in the market, expanding our product line and creating an omnipresent distribution network, we see the vertical becoming a strong driver of our growth in the future .
Our team strength
Our employees are our core strength and growth partners, it is due to their resolve and commitment that we have been able to announce such a stellar result, despite being in the middle of a pandemic, and would like to acknowledge their tireless efforts. We are gratified to have a team filled with experience, expertise and rich knowledge base who echoes our passion for excellence. We continuously strive to offer an inclusive, diverse, and conducive work environment and nurture our team members with training and upskilling opportunities.
Strengthening our fundamentals
During the year, India Ratings and Research upgraded our Long-Term Credit Ratings to 'IND BBB-' from 'IND BB+' with a positive outlook. Over the next two-three years, we endeavour to become a zero-debt company from the current level of Rs. 418.12 Crores backed by our robust operating cash flow.
We will continue to focus on improving our operational efficiencies. We will also simultaneously be concentrating on expanding our distribution network and restructuring it in line with the change in consumer behaviour to seize the growth opportunities in the market.
On behalf of the Board, I would like to take this opportunity to thank all our investors, shareholders, teams and customers for their continued trust, confidence, and support.Regards,