Chairman’s Message
Driving efficiency.
Propelling grwth.

Koushik Chatterjee

Dear Stakeholders,

It gives me great pleasure to present to you the 5th Integrated Report & 32nd Annual Accounts of your Company for the financial year ended March 31, 2022.

I hope you and your family are in good health. I take this opportunity to urge everyone to continue to remain vigilant against COVID‑19 and practice safe behavior in your day‑to-day lives.

You are aware that commodity prices globally saw a significant rally towards the end of the previous financial year, as a result of post‑lockdown global restocking. High feedstock and raw material prices continued through FY 2021‑22, putting pressure on working capital and margins. The year was also witness to the second wave of COVID, which took a significant toll on human lives; and then the Russia Ukraine conflict that started in the month of February’2022, which besides its humanitarian impact has also resulted in disruptions in the global supply chain for businesses in our industry and many other sectors.

Global GDP growth, stood at a healthy ~5.5% in calendar year 2021, after a 3.5% contraction in 2020. This improvement came on the back of rapid roll out of vaccinations, fiscal spending by governments, a rebound in consumer spending post-lockdown and consequent improved business activity. India’s GDP too is estimated to have grown 8.7% in FY 2021-22 against a contraction of ~6.6% in FY 2020-21.

During Q1 FY 2021-22, Covid-induced restrictions impacted the Company’s production. The situation improved July onwards of the financial year with economic activity picking up. The January to March quarter witnessed a much milder third covid wave hitting the country, but the economic impact was limited; however, the start of the Ukraine-Russia conflict in Q4 triggered a sharp jump in commodity prices which were already elevated. The surge in input costs was compounded by additional royalty on iron-ore for supplies from the captive mines of Tata Steel, affecting margins adversely in the later part of the year.

In the face of market volatility, your Company was resilient as a result of its strong focus on operational performance, cost optimisation and improvement initiatives, and agile procurement strategies. Aided also by the rise in finished goods market prices, the Company recorded an EBITDA of `394.68 crore (FY-21: `397.36 crore) and its highestever Profit Before Tax (PBT) of `339.32 crore (FY-21: `307 crore). The Board is pleased to recommend the highest-ever dividend of `8/- per equity share for FY 2021-22.

I will take this opportunity to mention the progress your Company has made in relation to its six business priorities, which continue to create value for all stakeholders

In the face of market volatility, your Company was resilient as a result of its strong focus on operational performance, cost optimisation and improvement initiatives, and agile procurement strategies.

  • Cost Leadership: The Company recorded its highest-ever Hot metal production, Ductile Iron (DI) pipe production, coke production and captive power generation. Stable Blast Furnace performance with controlled fuel rates amidst the raw material volatilities, with high pulverised coal injection and oxygen enrichment, led to significant reduction in hot metal production cost. Your Company continues to be one of the lowest cost producers in both its businesses.
  • Supplier of Choice: Your Company launched the Customer Relationship Management process in the pig iron division to enhance customer experience and also sharpen our analytics to be able to obtain better customer insights.
  • Robust People Practices: Your Company prioritised Learning & Development and Employee engagement initiatives by leveraging digital tools. The Gallup Employee Engagement survey has shown a marked improvement with the engagement ratio going up to 7:1 from 4.5:1 which is a benchmark. Your Company also takes pride on being certified as a ‘Great Place to Work’.
  • Responsible Corporate Citizenship: Your Company is now a participant in the Carbon Disclosure Project (CDP) and in the GreenCo journey. The ‘TML 300 schools project’, aims to provide quality school education to children in our community in the age bracket of 3-15 years in target villages with the ultimate goal of ensuring a child labour free zone. The water sustainability project ‘Jal se Jeevan’ will help your Company become Water Positive by 2025.
  • Focus on Downstream/ and Value-add: The first phase of the new Ductile Iron (DI) Pipe plant has been commissioned by leveraging digital technologies like Augmented Reality, a first in the DI Pipe industry. The new digital and robotics interventions will not only improve safety significantly but will also enhance productivity and quality of operations.
  • Innovate and Excel: Your Company continued its journey of deploying an integrated improvement framework and building a Digital culture by implementing several projects across ‘Smart machines’, ‘Real-time data & analytics’ and ‘Business on mobile’.
  • The medium to long term outlook of both the businesses remains stable and optimistic. For Pig Iron business, commodity prices may see some correction along with other raw materials, but the overall demand outlook remains stable. The Ductile Iron (DI) pipe business remains very robust with the Government’s thrust towards the developing the Water Infrastructure sector which is reflected in its ambitious flagship ‘Jal Jeevan Mission’ programmes. As the Company commissions its ductile iron pipe expansion project in phases, it will expand its product footprint steadily to seize new opportunities.

    Health and safety of our workforce remains the top priority for the Company. Your Company’s agile response to the Covid pandemic included a major vaccination drive for employees and their families including contract workers, creation of support groups, and digital technology-based health and wellness support for employees and their families, without any cost. In FY 2021-22, we conducted more than 15,000 COVID-19 tests of which more than 500 positive cases were detected; there were 22 hospitalisation cases with 3 unfortunate deaths. In addition to picking up hospitalisation costs of affected employees, for all cases where there was an unfortunate demise on account of COVID-19, your Company implemented a special compensation package.

    I would like to take this opportunity to thank all our shareholders for their continued support and confidence in the Company and the Management. I would also like to express my sincere gratitude to all the Government authorities, our customers, suppliers and partners for their trust and support to the Company. I am also thankful to the Unions for their constructive engagement and strong relationship, the employees, the management team, my colleagues on the Board and other stakeholders for their significant contributions to the Company during FY 2021-22.

    Warm regards,

    Koushik Chatterjee