One of the largest Wood and Agro-based paper manufacturers in India, Satia Industries Limited (SIL) has reported a 51% growth in its revenue from operation for FY 21-22. SILâ€™s revenue from operations increased by 71.85% from Rs. 1,727.97 MN in Q4 FY21 to Rs. 2,969.53 MN in Q4 FY22 mainly driven by better product mix and higher sales realization.
It surprisingly overtook many of its peers in production, to achieve 1,41,525 MT in FY22 implying a capacity utilization of ~117%. SIL has successfully commissioned their PM 4 and has augmented its total installed capacity to 205,000 MTPA.
Commenting on the performance of Q4 and FY22, Mr. Chirag Satia, (Executive Director) said that we are pleased to deliver an excellent quarter and fiscal in terms of volume as well as increased profits. The Revenue from Operations has increased by 37.29% in Q4 of FY22 vis-Ã -vis Q3 FY22 mainly on the back of robust demand leading to higher sales volume with better realization.
The 2nd half of the FY22 has witnessed rapid opening up of the economy and education sector, despite the wave of Omicron, which has led to a rise in demand for paper across industries. The Educational sector along with increased exports lead the demand of paper across the nation and our strong association with the various State Textbook corporations provides us a competitive edge. The current order book in hand stands at 65 days with attractive price realization.
The demand remained and continues to be robust as mentioned above, however there were macro headwinds faced by the overall industry in the second half of FY22 on account of rising prices of input, chemicals and fuel. We saw the cost of our key raw materials like Agro, Wood Chips and Waste Paper (Indian) rise by ~65 %, 5 % & 6.5% respectively, however our locational advantage of being in the wheat belt of India and cheap fuel of rice straw and other biomass and strong backward integration from power to chemical requirements have helped us to limit the impact of these headwinds and retain relatively healthy margins for FY22.
Mr. Chirag said, we are elated to share that with the successful commissioning of PM4, we have added 100,000 TPA to our installed capacity, taking our total installed capacity to 205,000 TPA. We expect to produce and add 40,000 MT additional paper from the new machine in first half of FY23 along with widening our product range, strengthening our position, even further, in the industry. We have imported this machinery from France and is one of the most advanced paper machineries in India. We estimate our revenues to grow by more than 70% with substantial increase in profits for FY23.
Before we go into â€œDisposable Cutleryâ€ segment with full zeal, we shall be looking forward to the Govt of India stand with respect to ban on single use plastic from 1 st July, 2022
We are very confident that our capex plans, strategy of venturing into new high growth potential green products and investing in the latest technologies holds promise to unlock great benefits for all our stakeholders in the future.â€
The management expect further growth in volumes for FY23 as compared to FY22 and expects to produce 100,000 tonnes additional paper from PM4 in FY23 contributing incremental revenue of INR 7500 million in FY23. The management expects that the EBITDA margins to expand by 100 bps in FY23.
In last three decades, SIL has witnessed a complete transformation in its operations and it has become fully backward integrated having integrated pulping, chemical recovery, and power self-sufficiency. SIL has 540 acres of eucalyptus plantations, developed as per Karnal Technology, consumes total treated water discharge, and also compliments the future wood raw material requirements. SIL has a strong Pan-India distribution network with 70+ dealers and 3 branch offices located in Delhi, Chandigarh & Jaipur with total Employee strength of 2,019+