Chairman's Message

From the desk of,


Chairman & Managing Director


Dear Shareholders,


The past 24 months have brought many salutary lessons.While tragic on a human scale, Covid-19 has providedcompelling proof that, together, we can overcome thecrisis. At the same time, the global spotlight was firmlyon dwindling natural resources and the need to urgentlychange the way we consume these resources. From theBoard’s perspective, Sarda Energy & Minerals Limited hasunderlined its resilience over the past 24 months. Wehave adapted the reality of uncertainties and continued to focus on our diversification and integration strategy toachieve a self-reliant balanced growth.


The World Around Us


The world GDP rebounded in CY 2021 owing to improvedeconomic performance led by rapid vaccinations,relaxation in curbs caused by the pandemic, fiscal support,robust consumer spending and improved businesssentiments. The Indian economy strongly reboundedagainst the pandemic headwinds and recorded a GDP of8.7% in FY 2021-22. However, the last quarter of FY 2021-22, posed challenges in the backdrop of geo-politicaltensions and global inflation. The same is expected tocontinue into the first half FY 2022-23 as the World Bankexpects global growth to decelerate from an estimated5.5% to 3.2%. High commodity and energy prices, inflationand recession risks continue to linger over the globaleconomy.


Conviction and Competitiveness

As you all are aware, Sarda Energy & Minerals Limited waslargely an integrated producer of long steel productsuntil late 2000s before foraying into hydro powerbusiness with a sole objective of diversified revenuestreams and strong cash flows. Our subsequent forayinto coal and iron ore mining has further strengthenedour raw material security. Today, we have 142 MW ofconsolidated operating capacities of hydro power, with25 MW in pipeline. Captive iron ore mine, coal mine andthermal power plants are meeting a sizable portion ofkey input requirements. Despite two years of lockdown - relatedchallenges, coupled with supply chain and costinflationary roadblocks, we streamlined ourselves creatinga more efficient organisation, consistently deliveringimproved performance, while significantly reducingdebt through disciplined financial management. We arestrategically positioned ahead of the curve and ready for any opportunity.


Consistent and Robust Performance

In FY 2021-22, we have once again delivered robust resultsacross all key metrics. On a consolidated basis, we reportedhighest ever revenues and profits of ₹3,964 Crore and ₹807 Crore, respectively, registering a growth of 69% and115%. Our consolidated EBITDA strengthened by 112%,to ₹1,406 Crore while cash profits improved by 111%,to ₹950 Crore during the year. We further announcedbuyback of 8,11,108 equity shares for a consideration of ₹121.67 crore at ₹1,500/- per share and also rewarded ourshareholders through an interim dividend payout of ₹7.50per share for F.Y. 2021-22. These results also underscorethe benefits of our diversification and integration strategyto create operational synergies and economies of scaleand offset cyclicality in our key commodities.


Key Strategic Priorities

As we focus on expanding our competitive advantages,we continue to monitor the current landscape of ourbusiness to maximize value creation. As such, we haveprioritized the following action plan for the next leg ofgrowth:

1. Focus on hydro: With our 113 MW Sikkim HydroProject getting commercialised and 25 MW Projectunder execution at Chhattisgarh, we are competitivelyplaced to achieve consistent returns overtime, withsubstantial contribution to EBIDTA. Besides, the cashflows being generated from this business are self – sufficientfor any future capex in this business. Welook forward to expanding the hydro capacities upto250 MW over the medium term.


2. Mining: With the objective of rationalizing inputcosts and securing raw materials, we commissionedGare Palma IV/ 7 Coal Mine at Raigarh during theyear, while the Shahpur West Coal Mine is still work in-progress and expected to be operational in aboutthree years from now. Besides, we are also exploringfurther opportunities in iron ore mining and are alsobidding for mining assets.


3. Expansion in ferro alloys: Our ongoing ferro alloyscapacity expansions by 36 MVA to 147 MVA, isexpected to be operational in FY 2022-23. This wouldfurther enhance our export presence and allow usto emerge as among India’s top 3 producers of ferroalloys.


4. Green power and sustainability: Climate changeis the defining challenge of our time, and SardaEnergy is committed to playing its part in addressingit. Our constant endeavour towards sustainabilityis reflected in the initiatives we have taken over theyears. The coal gasification plant has not only allowedus to reduce carbon emissions but has also resulted incost reduction and better efficiencies. Besides, it hasalso given us the opportunity to earn carbon credits,making us very few companies in India to achieve this.We are also exploring possibility of additional wasteheat recovery facility of 11 MW to further support ourcause of recycling and sustainability.



Closing Note

In line with best practices, we take an inclusive approachto the broader stakeholder base that underpins our long - termcommitments. We will continue to evolve andsurpass performance expectations on one hand, andcontinue to strengthen our business sustainability thatbenefit all our stakeholders, including our communitiesand planet. Our employees, who are vital to our success,will continue to get opportunities for their developmentand fair returns for their commitment and passion.


I thank my fellow Directors, our executive managementteam and our entire staff for their adaptability andresilience and their unremitting efforts in helping driveour business forward in accordance with our purpose andvalues. By delivering on our promises, we have establishedthe credibility and capabilities that are the foundation forthe next phase of growth.


Yours sincerely,
Kamal Kishore Sarda