Our competitive position today has also significantly improved, through a strengthened brand portfolio, larger geographical footprint, and stronger and deeper distribution across markets.
As the world starts to adjust to a new normal with fewer COVID-19 cases along with mass vaccination present a positive outlook for the future.
Looking Back at our Best-ever Performance
We would not have been able to achieve this feat in an unprecedented year had it not been for the tireless efforts of our employees, wholesale dealers and their teams, our farmers and supply chain partners.
Our financial performance and growth trajectory remain impressive, with profits growing by 4% to an all-time high of `312 Crores. Over a 10-year period, our PAT has grown at a CAGR of 13% and our market capitalisation at a CAGR of 18%. FY 2020-21 witnessed improvement in our profitability by 4.2%, despite a tough year. This growth was driven by improving our product mix, aggressive pricing and cost optimisation measures.
Our market capitalisation witnessed a significant improvement by over 22%, from over `4,280 Crores in FY 2019-20 to `5,233 Crores in FY 2020-21.
Our competitive position today has also significantly improved, through a strengthened brand portfolio, larger geographical footprint and stronger and deeper distribution.
Over the last 5 years, we created and grew our brand, Total – with annual consumer spends of `2,000 Crores. Total is the largest capsule cigarette brand and is already among the top five cigarette brands in the country. This makes it the most successful new brand in the cigarette industry in the last 3 decades. That this was achieved in a record 5-year period, is testimony to VST’s single-minded focus and continuous innovation capability.
Strategies for Long-term Growth
Our focus on creating long-term value for our shareholders has led us to identify a few strategic focus areas, which have been arrived at after considering the market opportunities and our inherent strengths.
We continue to invest in our R&D facilities and personnel training to develop unique blends with innovative capsule filters, which appeal to the sensibilities of modern adult smokers. Our R&D lab received ‘Certificate of Continuation’ of ISO 17025:2017 for FY 2020-21 from NABL Quality Council, Government of India.
Developing Strong Brands
Our brand portfolio comprises some of the most iconic cigarette brands, including Total and Charms in top 10. Our brandbuilding efforts, complemented with innovation, will make us more future ready even as we witness adult smokers becoming more open to trying novel options. We, at VST Industries, strongly believe in the management philosophy of ‘launch fast, fail fast’ to increase our probability of success.
Expanding Geographic Footprint
Another area of focus has been geographical expansion, which in this industry is a challenging objective to pursue. In the last 6 years, we made big strides and today we are present in 80% of India – the aim is to cover every geography in the next 3 years.
Our distribution network has grown by 23% and direct retail coverage by 41% over the last 6 years. Through our wholesale dealer network our products directly reach over a million outlets. As the company embarks on a new phase of digitisation, this will add more muscle to our already strong distribution.
At VST, we believe in multiplying the value we generate for our stakeholders and communities. We support our farmer partners in developing quality tobacco with the lowest pesticide residue levels and low TSNAs (Tobacco Specific Nitrosamines), which are within international standards. In addition, we invest to support community infrastructure development such as solar streetlights and smart toilets.
Our employees and our culture have always been the pride of VST.
FY 2020-21 is a special year for us, as it is our 90th Annual Report. We have been able to continue winning, even during these challenging times which reflects our inherent resilience, growth focus and winning attitude.
Over the last 5 years, we created and grew our brand, Total – at a consumer spend of ₹ 2,000 Crores, which is by far the largest capsule cigarette brand in the country and is estimated to already be among India’s top 5.
I am glad to report that in FY 2020-21, we scored a record high on employee satisfaction. Our Team will remain the most important pillar in our continuing growth story.
I am confident that these strategies and a focused engagement approach will enable us to keep winning consistently in the future, stay true to our vision, and uphold our commitment to bringing growth and opportunities for our fraternity of stakeholders.
Managing Director & CEO