Chairman's Message

Dear Shareholders,

It gives me a great pleasure to report that our performance in 2017-18 has been the best ever, both operationally as well as financially. The results achieved during the year clearly reflect our philosophy of disciplined planning and execution of the growth-accretive strategies. We are neither over-aggressive nor dormant. We have always taken step-by-step approach towards maintaining a strong financial health of the Company, allowing us to sail through even in the toughest of times. As the business environment improved, the positive impact was visible in our performance. We have focussed on backward integration and have gradually ramped up Iron Ore production capacity. Today, our different business divisions complement each other, thereby increasing overall efficiency and profitability. The results are clearly visible.

On consolidated level, we achieved record production of pellet, steel billets, wire rods, ferro alloys and hydropower. We have achieved record turnover of Rs.2,200 Crore, EBITDA of Rs. 470 Crore and profit of Rs. 200 Crore, each growing 41%, 66% and 62%, respectively as compared to previous year. Our earnings per share has increased from Rs. 36 crore to Rs. 56 crore recording a 56% increase in the EPS. The Company also declared highest ever dividend of Rs.5 per share, rewarding all our shareholders for the faith and confidence showed by them in the Company and its management.

The Indian Government continued to drive reforms across sectors to improve transparency and boost investments in the country. One such revolutionary reform was the implementation of Goods and Services Tax (GST). The new tax mechanism resulted in some transitory pain for a few months. Despite this temporary lull, India emerged as a fast growing major economy with 6.7% growth in GDP. There was a strong revival in the country's investment and consumption. Besides, there has also been encouraging development in the steel industry. This has been a great positive up-cycle with India overtaking Japan to become the world's second largest steel producer. Thanks to Government's increasing impetus on improving country's infrastructure and promoting initiatives like 'Housing for all’ and smart cities development. This will enhance the demand for steel products and benefit us.

On the backdrop of a favourable positive steel cycle for next five to seven years, as anticipated by us, we have initiated expansion programs of our steel-production capacity at Raipur and ferro alloys production capacity at Visakhapatnam. Besides, we are also enhancing our pellet production capacity by 2 lakh metric tonne without incurring any additional capex, environment clearances for which are awaited.

On the hydropower front, we commissioned our 24-megawatt hydropower plant at Gullu, in Chhattisgarh. Our strategic foray into hydropower is a conscious attempt to generate green energy and add perennial stream of cash flow to sustain the down turn and de-risk ourselves from the cyclical effect of the steel industry. There has been very low capacity addition in the hydropower generation as against a sequential rise in demand over the past few years. This would allow us to fetch higher realisations per unit going ahead. As a result, we are quite bullish about our upcoming hydro project in Sikkim. It will significantly add to our revenues and strengthen our bottom line, once it comes in stream in the financial year 2019-20.

At SEML, we have consistently focussed towards driving efficiencies. Over the past five to six years, we have continuously demonstrated several cost reducing initiatives across our operations. Besides, an equal attention has been given to the safety and environment, waste recycling and improving recoveries, leading to improved margins.

As a responsible corporate, we have always given an equal attention to the communities residing at our plant's vicinity. We have adopted 90 single teacher schools in the tribal areas of Chhattisgarh for providing basic education. We have actively sponsored medical facilities and provided assistance in the primary healthcare across villages. We also operate a well-equipped ambulance with doctors and have set up basic first-aid facilities in the villages surrounding our iron ore mine. We have extended financial assistance for educational purposes including infrastructure facilities, salaries to teachers, bus facilities for children, etc.

As a closing note, I would simply like to state that we have been strategically expanding our ongoing operations and scouting for future growth through the underlying industrial opportunities. I would like to acknowledge the efforts of our employees and the leadership team for successfully implementing company's execution strategies. I also thank the respected Board Members for their able guidance. And, lastly, I would like to thank our stakeholders for believing our story and being a part of our growth journey.

Kamal Kishore Sarda,  
Chairman and Managing Director