aishwarya technologies telecom ltd Management discussions

OVERVIEW OF FY 2022-23

Industry structure and developments.

The telecommunications testing and measurement equipment industry is a crucial component of the telecommunications sector, ensuring the reliability and performance of communication networks

Its commendable that ATTL has obtained TEC (Telecommunication Engineering Centre) approval for a comprehensive range of telecom testing and measurement equipment. This approval signifies the compliance of these products with the necessary technical standards and specifications, making them suitable for deployment in critical Fibre Laying projects.

The approved products, including various OTDRs, Splicing Machines (both single fiber and Ribbon Fiber), Optical Power Meter, Optical Variable Attenuator, and Optical Laser Source, play vital roles in ensuring the reliability, performance, and quality of fibre optic networks. They are essential tools for telecommunications and infrastructure projects, particularly in the context of Fiber Laying projects.

(b) Opportunities and Threats.

5G Rollout: The deployment of 5G networks continues to create significant opportunities. Testing equipment manufacturers can benefit from the demand for solutions that ensure 5G network performance, latency, and reliability.

IoT and M2M Growth: The expansion of the Internet of Things (IoT) and Machine-to-Machine (M2M) communications requires specialized testing equipment. Companies can capitalize on this trend by developing IoT and M2M testing solutions.

Network Virtualization: With the shift towards network virtualization and Software-Defined Networking (SDN), there is an opportunity for testing equipment that supports these dynamic and software-based networks.

Cybersecurity Focus: As network security becomes paramount, theres a growing need for cybersecurity testing equipment to identify vulnerabilities and protect against threats.

Automation and AI Integration: Automation and artificial intelligence are increasingly integrated into testing solutions to streamline processes, improve efficiency, and handle the complexity of modern networks.

Remote Testing: The COVID-19 pandemic accelerated the adoption of remote testing solutions. Companies can continue to develop and offer remote testing tools to meet this demand.

Threats:

Rapid Technological Advancements: The fast pace of technological change can pose a threat. Companies must constantly innovate to keep up with evolving network technologies.

Competition: Intense competition among established players in the testing equipment industry can lead to price pressures and reduced profit margins.

Regulatory Changes: Changes in regulations or standards can impact product compliance and necessitate costly updates.

Economic Downturns: Economic downturns can lead to reduced capital spending by telecom companies, affecting demand for testing equipment.

Environmental Concerns: Stricter environmental regulations can impact the production and disposal of testing equipment, increasing costs.

(c) Segment–wise or product-wise performance

Wireless Communications: ATTL has maintained a strong presence in the wireless communications segment. Its testing and measurement equipment for wireless networks continue to perform well, ensuring network reliability and performance, which is critical for the expanding 5G infrastructure.

Optical Networks: Given the plan to develop EDFA (Erbium-Doped Fiber Amplifier) amplifiers, ATTL aims to strengthen its position in the optical network segment. EDFA amplifiers are essential components in long-haul optical networks, and this move reflects ATTLs commitment to this critical segment.

Data Centers: ATTLs testing solutions for data centers have contributed to its segment-wise performance. As data centers continue to grow in size and complexity, ATTLs equipment supports the maintenance and optimization of these crucial facilities.

IoT and M2M: ATTLs plans to introduce in-house produced cable route racers with built-in GPS could position the company well in the IoT and M2M segment. These racers are valuable tools for tracing buried cables, which are integral to IoT deployments.

Product Developments:

EDFA Amplifiers: The development of EDFA amplifiers is a strategic move, as these amplifiers are essential in long-haul optical networks. ATTLs entry into this market will likely cater to telecom operators and network providers looking to enhance the capacity and reach of their optical networks.

Cable Route Racers with GPS: Introducing cable route racers with built-in GPS is a forward-thinking initiative. These devices will find applications not only in the telecom industry but also in sectors like railways and power plants, where accurate cable tracing is essential for maintenance and troubleshooting.

(d) Outlook

Developing EDFA amplifiers opens doors to long-haul network infrastructure projects, including those related to 5G expansion and high-capacity data transport.

The introduction of cable route racers with GPS addresses a broader market beyond telecommunications, potentially serving industries with extensive buried cable networks. This product can improve efficiency and reduce downtime in various sectors.

Both developments align with industry trends and growing demand for reliable and efficient telecom infrastructure and cable management solutions.

(e) Risks and concerns.

Developing EDFA amplifiers requires significant expertise in optical technology and may face competition from established players. ATTL needs to ensure the quality and performance of its amplifiers to gain market acceptance.

The success of cable route racers with GPS depends on effective marketing and sales efforts across multiple industries, as well as ensuring the accuracy and reliability of the GPS tracking system.

ATTLs strategic moves to enter the EDFA amplifier market and introduce cable route racers with GPS demonstrate its commitment to diversifying its product portfolio and addressing critical needs in the telecommunications and related sectors. Careful execution and product quality will be key to realizing the potential benefits in these segments.

Internal control systems and their adequacy:

The Company has adequate internal control systems commensurate with the size and the nature of business of the Company.

The internal control system is constantly assessed and strengthened with tighter control procedures. The internal control systems ensure effectively of operations, compliance with internal policies and applicable laws and regulations, protection of resources and assets, and accurate reporting of financial transactions.

The audit committee periodically reviews the adequacy and efficacy of the said internal control systems. All the issues relating to internal control systems are resolved by the audit committee.

Discussion on financial performance with respect to operational performance:

During the year under review, the Company has recorded revenue of Rs. 490.28 Lakhs and incurred a net loss of Rs. (107.50) Lakhs.

There were no operations in the subsidiary and therefore there is no change in revenue and negligible change in net loss.

Material developments in Human Resources / Industrial Relations front, including number of people employed.

There are no material developments in the Human Resources area. The Industrial relations have been considered to be satisfactory. The Company constantly reviews the manpower requirements and effective steps are being taken to meet the requirements. The total number of people directly and indirectly employed by the Company is 40.

Details of significant changes in key financial ratios, along with detailed explanation thereof: There significant change in net profit margin owing to the factors as discussed above.

Particulars	2022-23	2021-22
Debtors turnover ratio	0.93	1.10
Inventory turnover ratio	0.45	1.20
Current Ratio	0.41	0.41
Debt equity ratio	2.19	2.37
Operating profit margin (%)	-65.51%	-41.21%
Net profit margin (%)	-24.20%	-43.34%
Return on Net worth	-0.30	-1.30

2. Details of any change in return on net worth as compared to the immediately previous financial year along with a detailed explanation thereof: There is -1.00 % change on return on net worthas compared to the immediately previous financial year.

Disclosure of Accounting Treatment:

The Company has not carried out any treatment different from that prescribed in Accounting Standards.

Cautionary Statement

Statements in this Management Discussion and Analysis Report may be "forward looking statements: within the meaning of applicable securities laws and regulations. These statements are based on certain assumption and expectations of future events. Actual results could differ materially from those expressed or implied. Important facts that could make a difference at the Companys operations include economic conditions affecting domestic demand and supply conditions, finished goods prices, changes in government regulations and tax regime etc. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of subsequent developments, information or events.