The statements in the "Management Discussion and Analysis
Report" describe the Companys objectives, projections, expectations, estimates
or forecasts which may be "forward-looking statements" within the meaning of the
applicable laws and regulations. Actual results may differ substantially or materially
from those expressed or implied therein due to risks and uncertainties.
Important factors that could influence the Companys operations,
inter alia, include global and domestic demand and supply conditions affecting selling
prices of finished goods, input availability and prices, changes in government
regulations, tax laws, economic, political developments within the country and other
factors such as litigations and industrial relations.
OPERATING ENVIRONMENT
Growth
Indias economy showcased significant growth in the
January-March quarter of 2022-23, with a Gross Domestic Product (GDP) growth rate of 6.1%,
reflecting a steady expansion from the previous quarters. The growth rates for
October-December 2022 and July-September 2022 stood at 4.5% and 6.2%, respectively. This
surge, primarily driven by improved performance in agriculture, manufacturing, mining, and
construction sectors, contributed to an annual growth rate of 7.2%. The robust growth
propelled the Indian economy to reach $3.3 trillion and sets the stage for achieving the
ambitious $5 trillion target in the coming years.
The economy grew by 7.2% in 2022-23, taking into account the cumulative
growth throughout the fiscal This was slightly lower than the previous fiscal years
growth rate of 9.1% in 2021-22. Various segments within the services sector contributed to
the overall economic growth. The trade, hotel, transport, communication, and services
related to broadcasting segment registered a growth rate of 9.1% in Q4 2022-23, compared
to 5% growth in the same period last year. Financial, real estate, and professional
services witnessed a growth rate of 7.1% during the quarter, up from 5.7% in the previous
year.
Prime Minister Narendra Modi said that the 2022-23 GDP growth figures
underscored the resilience of the Indian economy amidst global challenges. "This
robust performance along with overall optimism and compelling macroeconomic indicators,
exemplify the promising trajectory of our economy and the tenacity of our people," he
said in a tweet.
Exports of goods and services accounted for 23.5% of GDP, the highest
since 2014-15, while private consumption hit the highest level since 2006-07 at 58.5% and
gross fixed capital information, reflecting a sustained increase, is at the highest point
since 2013-14 at 34% of GDP," the Chief Economic Advisor said.
Gross Value Added (GVA) from the employment-intensive construction
sector grew 10% in 2022-23, from 14.8% in 2021-22. Mining and quarrying GVA growth slowed
to 4.6% from 7.1%. Electricity, gas, water supply and other utility services GVA
rose 9%, only slightly slower than 9.9% in 2021-22. Public administration, defence and
other services GVA grew 7.2% in 2022-23, compared to 9.7% in the previous year.
Economic scenario
In FY 2022-23, Indias real GDP expanded at an estimated 6.9
percent. Growth was underpinned by robust domestic demand, strong investment activity
bolstered by the governments push for investment in infrastructure, and buoyant
private consumption, particularly among higher income earners. The composition of domestic
demand also changed, with government consumption being lower due to fiscal consolidation.
Recovering from pandemic-induced contraction, Russian-Ukraine conflict
and inflation,Indian economy is staging a broad based recovery across sectors, positioning
to ascend to the pre-pandemic growth path in FY 2023
Indias GDP growth is expected to remain robust in FY 2024. GDP
forecast for FY 2024 to be in the range of 6-6.8%
Private consumption in H1 is highest since FY 2015 and this has led to
a boost to production activity resulting in enhanced capacity utilisation across sectors
The credit growth to the MSME sector was over 30.6 per cent on average
during Jan-Nov 2022
Retail inflation is back within RBIs target range in November
2022
Indian Rupee performed well compared to other Emerging Market Economies
in Apr-Dec 2022
Direct Tax collections for the period April-November 2022 remain
buoyant
Economic growth to be boosted from the expansion of public digital
platforms and measures to boost manufacturing output
Market size
Indias gross domestic product (GDP) has touched the $3.75
trillion-mark in 2023, up from around $2 trillion in 2014
The Finance Ministry further stated that India is the fifth largest
economy in the world. Indias GDP stood at $3,737 billion in current price terms,
lower than the USA ($26,854), China ($19,374 billion), and Germany ($4,309 billion).
Inflation
In financial year 2023, the annual change in food inflation was 7.7
percent in India. In India, the most important category in the consumer price index is
Food and beverages (45.86 percent of total weight), of which Cereals and products (9.67
percent), Milk and products (6.61 percent), Vegetables (6.04 percent), Prepared meals,
snacks, sweets, etc. (5.55 percent), Meat and fish (3.61 percent), and Oils and fats (3.56
percent).
The annual inflation rate in India fell to 4.25% in May of 2023 from
4.7% in the previous month, the lowest since April 2021 and firmly below market forecasts
of 4.42% amid a fresh slowdown in inflation for food. The result drove inflation closer to
the RBIs target of 4% and extended the decline past the central banks upper
limit of 6%, paring concerns of an eventual resumption of its tightening cycle. Consumer
food inflation fell to 2.91% from 3.84% in the previousmonth,amidsignificant fats
(-16.01% vs -12.33% in April), vegetables (-8.18% vs -6.5%), and meat and fish
(-1.29% vs -1.23%).
Interest rates
The Reserve Bank of India raised its key repo rate by the expected 25
bps to 6.5% during its February 2023 meeting, the sixth rate hike in a row, amid easing
inflation prompted by moderation in food prices. The annual inflation rate slowed to a
1-year low of 5.72% in December 2022 and stayed below the Reserve Bank of India target of
2-6% for the second straight month. The decision followed a 35 bps hike in December last
year. The central bank has lifted rates by an aggregate of 250bps starting from May 2022,
bringing the rate to a level of January 2019. The 6.5% from boardlowereditsinflation 6.7%
and revised Indias GDP growth to 7% from 6.8%
Financial markets
Reserve Bank of India (RBI) has said that in 2022-23 the domestic
financial market movements remained orderly, notwithstanding persisting impact of global
spillovers during the year. It further said that the Indian equity market exhibited signs
of decoupling on sustained support from domestic institutional investors, adding that the
rupee exhibited orderly adjustment with lower volatility relative to many other EMEs.
"The money market trends moved in alignment with the tightening of
policy rate cumulatively by 250 bps and the change in policy stance towards withdrawal of
accommodation," it said. Going forward, financial markets will be conditioned by
domestic macroeconomic outlook as also the future path of US monetary policy and the
strength of the US dollar, the RBI concluded.
Industry structure and development
Food is one of the most important needs of human evolution. Access to
quality food and water is a basic human right. The F&B industry is growing and
providing a variety of foods and beverages for their customers through quality and
innovation. The hospitality sector has an enormous influence on the Indian economy.
According to a report by the Federation of Hotel and Restaurant Association of India,
(Hotels, Restaurants and Catering) industry contributes approximately USD 78 billion
annually to the Indian economy, which contributes to more than 7 percent of Indias
GDP.
Indias food processing sector has been one of the key sectors,
which is growing due to its response to the changing demographics and lifestyle,
affordable workforce availability, free availability of raw materials, and is boosted by
growth in export opportunities and government advocacy to develop food manufacturing. The
growth in these sectors are also propelled by the pandemic, hike in expendable income
leading to increasing appetites for discretionary spends on branded items including
processed food-items, a rejuvenated retail sector and state sponsorship and for the food
processing industry, this is just the beginning of a golden period.
The core business of your company is the catering, management service,
hospitality and restaurants. As set out in Regulation 34 read with Schedule V of the SEBI
(Listing Obligations and Disclosure Requirements) Regulation, 2015, Company provides the
following details relating to Management Discussion and Analysis:
1. Segment wise or product-wise performance
We not only showed improvement in the financial frontier but also on
companys share performance in the market.
2. Discussion on financial performance with respect to operational
performance
The segment and product wise performance is as below:
S. No. |
Particulars |
As at 31st March, 2023 |
As at 31st March, 2022 |
|
Catering & Management Services |
|
|
| 1. |
Sale of Food & beverages |
19029.97 |
13386.14 |
| 2. |
Management Service Charges |
6677.41 |
6428.13 |
| 3. |
Room Revenue |
141.70 |
124.92 |
Total |
|
25849.08 |
19939.19 |
Your directors feel that the financial performance of the Company has
improved in the FY 2022-23 compared to last FY 2021-22
3. Business development
The major developments during the year was as under:-
Market Research: To conduct thorough market research to understand the
specific needs and preferences of patients in different healthcare settings. To invest in
research and development to continually improve the product offerings. To identify the
target audience, their dietary requirements, cultural considerations, and any restrictions
or guidelines that need to be followed. To stay updated on the latest nutritional
guidelines, food trends, and advancements in patient care to develop innovative meal
options that meet evolving patient needs Identify Opportunities: To look for gaps or unmet
needs specificdietary of the patients. This could include requirements, innovative menu
options, improved delivery systems, or specialized services for different healthcare
facilities or patient groups. To consider partnerships with home healthcare agencies,
assisted living facilities, or senior living communities to reach a wider customer base.
Quality Control and Compliance: To ensure strict quality control
measures are in place to meet regulatory requirements and maintain the highest standards
of food safety. To establish internal processes for regular inspections, certifications,
and compliance with health and safety guidelines. To implement a robust feedback loop to
gather insights from patients, healthcare professionals, and facility administrators.
Customer Relationships: To build long-term relationships with
healthcare facilities and other businesses. To provide excellent customer service, ensure
reliable and timely deliveries, and address any concerns or issues promptly. To maintain
open lines of communication to understand evolving needs and adapt to offerings
accordingly. Monitor Competition: To keep a close eye on the competitors, including their
product offerings, pricing strategies, and marketing initiatives. To identify
opportunities to differentiate the food business by offering unique value propositions or
niche services.
4. Opportunities
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Growing Healthcare Industry: The expanding healthcare industry and
increasing patient volumes present opportunities for the company to expand its customer
base and revenue streams.
Online Presence and Delivery: Developing a strong online presence,
including online ordering, menu browsing, and delivery options, can cater to the
convenience-driven demands of customers.
Corporate Events and Functions: Expanding catering services to
corporate events, conferences, and business functions can tap into a growing market
segment and provide recurring revenue opportunities.
Specialty and Niche Offerings: Catering companies can develop niche
specialties (e.g., vegan, gluten-free, ethnic cuisine) to cater to specific . dietary
preferences and capitalize on emergingtrends
Partnership with Healthtech Companies: Collaborating with healthtech
companies or startups focused on nutrition and patient care can unlock synergies and drive
innovation within the patient food service sector.
Expansion into Other Healthcare Facilities: The company can explore
expanding its services beyond hospitals to other healthcare facilities such as long-term
care centers, rehabilitation centres or outpatient clinics
Threats
Rising Input Costs: Fluctuating prices of food ingredients, labor, and
other inputs can affect profit margins and operational efficiency within the industry.
Competitive Landscape: The clinical nutritional service industry faces
competition from both external vendors and in-house hospital food service departments,
potentially leading to price pressures and reduced market share.
Changing Dietary Trends: Shifts in dietary preferences and trends, such
as the rise of specialized diets or food delivery services, may impact the demand for
traditional patient food services.
Regulatory Compliance: Adhering to regulatory requirements, including
food safety standards and nutritional guidelines, is crucial to maintain compliance and
avoid penalties or reputational damage.
Food Safety and Quality Concerns: Any incidents related to food safety,
contamination, or quality issues can harm the companys reputation and result in
legal liabilities
Patient Satisfaction and Experience: Ensuring high patient satisfaction
levels is essential as dissatisfied patients may provide negative feedback, affecting the
companys reputation and future contracts with healthcare facilities
5. Risks and concern
Dietary Restrictions and Allergies: Patients often have specific
dietary requirements, restrictions due to medical conditions. Ensuring accurate and safe
meal preparations that adhere to individual dietary needs is crucial. Mistakes or
oversights in managing dietary restrictions can have severe consequences for patient
health.
Food Safety and Hygiene: Maintaining high standards of food safety and
hygiene is essential to prevent foodborne illnesses and infections among vulnerable
patients. Proper storage, handling, and preparation of food, as well as regular sanitation
and cleanliness practices, are critical to mitigate these risks.
Menu Variety and Nutritional Balance: Providing diverse and
nutritionally balanced meals that meet patients dietary needs can be challenging.
Ensuring that the menu offers a range of options while meeting nutritional requirements
requires careful planning and consideration.
Cost Control and Budget Constraints: Balancing cost control measures
while maintaining food quality and patient satisfaction is a constant concern.
Customer satisfaction and feedback: Customer satisfaction is a key
concern. Unhappy patients/ customers can provide negative feedback, impacting the
reputation of the provider and potentially affecting future contracts with healthcare
facilities. Regularly gathering patient/customer feedback and making improvements based on
their suggestions is essential.
Supply Chain Management: The Company relies on a complex supply chain
to ensure the availability of fresh ingredients and food products. Managing inventory,
minimizing waste, and addressing potential disruptions in the supply chain are important
for maintaining consistent service quality.
Regulatory Compliance: Compliance with food safety regulations, health
codes, and dietary guidelines is essential for food service providers. Meeting regulatory
requirements, obtaining necessary certifications, and maintaining food safety records are
critical to ensure legal compliance and avoid penalties.
Competition and Pricing Pressure: The food service industry is highly
competitive, with numerous local and national players. Intense competition can lead to
pricing pressure and margin erosion, affecting profitability and market share.
It is crucial for food service industry to address these risks and
concerns through proactive risk management strategies, food safety protocols, staff
training programs, quality control measures, and strong customer service practices.
Collaborating closely with healthcare facilities, nutritionists, and dietitians can also
help address individual patient needs effectively. Adapting to changing customer
preferences, staying updated with industry trends, and maintaining strong relationships
with clients and suppliers can also help mitigate risks and ensure long-term success.
6. Outlook
Focus on Patient-Centered Care: The healthcare industry is increasingly
prioritizing patient-centered care, which includes providing nutritious and satisfying
meals to patients. There is a growing recognition of the important role that food plays in
the healing and recovery process. As a result, patient food services are being seen as an
integral part of overall patient care and experience.
Embracing Health and Wellness Trends: Consumers are increasingly
conscious of their health and wellness. Catering companies are incorporating healthier
ingredients, organic and locally sourced produce, and offering customizable options that
allow individuals to make healthier choices. This aligns with the growing focus on
wellness and nutrition in the overall food industry.
Collaboration with Local and Niche Food Providers: Catering companies
are partnering with local and niche food providers, such as specialty bakeries, gourmet
food suppliers, and ethnic cuisine experts. Collaborations can enhance menu variety, offer
unique culinary experiences, and tap into specialized customer segments. Regulatory
Considerations: Patient food companies need to be aware of and comply with relevant health
and safety regulations. Understanding and adhering to dietary guidelines, food labeling
requirements, and quality control measures are crucial for maintaining trust and
credibility.
7. Internal controls and their adequacy
Your Company remains committed to improve the effectiveness of internal
control systems for business processes with regard to its operations, financial reporting
and compliance with applicable laws and regulations. The company has proper and adequate
internal control system to ensure that all that all the assets are safeguarded and
protected against loss from unauthorized use or disposition and that all transactions are
authorized, recorded and reported correctly. Regular internal audits and check are carried
out to ensure that the responsibilities are executed systems and procedures to ensure the
efficient conduct of business the Audit Committee of the Board oversees the internal
controls within the organization. Further, as per Statutory Auditor also the internal
control commensurate with the size and complexity of the operation of the Company.
8. Material developments in Human Resources / Industrial Relations
front, including number of people employed.
The workforce is a critical factor in maintaining quality and safety,
which strengthens the competitive position and the human resource policies focus on
training and retaining of the employees of the Company. The Company trains employees
regularly to increase the level of operational excellence, improve productivity and
maintain compliance standards on quality and safety. Employees are offered
performance-linked incentives and benefits and the Company conducts employee engagement
programs from time to time. Our employees form the backbone of our organization. Your
company takes pride in the commitment, competence and dedication shown by its employees in
all areas of operation. Industrial relations have remained harmonious throughout the year.
Your company endeavors to follow best HR practices across all areas. These cover
recruitment, induction, development and training and appraisal systems which are tied in
with defined key result areas. There are 4384 permanent staff, FTCs
Contracted/outsourced staff/Deputed staff as on March 31, 2023.
The Company would like to sincerely appreciate the valuable
contribution and support of employees towards the performance and growth of the Company.
The management team comprises of professionals with a proven track record. The Company
continues to remain focused and sensitive to the role of human resources in optimizing
results in all its areas of working and its industrial relations also continue to be
cordial.
9. Detailsofsignificant or more as compared to the immediately
previous financial year) in key financial ratios, along with detailed explanations
therefore, including:
|
Ratio Analysis |
FY 22-23 |
FY 21-22 |
| Debtors Turnover Ratio |
Turnover/Avg A/cs receivable |
5.96 times |
5.69 times |
| Inventory Turnover Ratio |
Cost of goods sold/Avg Inventory |
97.71 times |
88.44 times |
| Interest Coverage Ratio |
EBIT/Interest |
5.09 times |
12.72 times |
| Current Ratio |
Current Assets/Current Liabilities |
1.34 times |
2.60 times |
| Debt Equity Ratio |
Total Liability/Shareholders Equity+ Re- |
1.21 times |
0.48 times |
|
serves & Surplus |
|
|
| Operating profit Margin % |
EBIT / Net Sales |
7.98% |
6.96% |
Profit/T Net Margin % Net |
4.61% |
5.14% |
(EBIT- Earnings before Interest & Taxes)
Your Companys financial performance has improved in the FY
2022-23 compared to last years. The revenue from operations has increased from
199.39 crores in FY 2021-22 to 258.49 crores in FY 2022-23. There has been an increase of
29.64% in the revenue as compared to last year, because of which there has been a change
in most of the ratios.
10. Details of any change in Return on Net Worth as compared to the
immediately previous financial year along with a detailed explanation thereof:
Return on net worth |
FY 22-23 |
FY 21-22 |
| Return on Capital Em- |
EBITDA/Capital employed |
19.73% |
28.38% |
| ployed % |
|
|
|
(EBITDA- Earnings before Interest, Taxes, Depreciation and
amortization)
Your Companys financial performance has improved in the FY
2022-23 compared to last years. The revenue from operations has increased from
199.39 crores in FY 2021-22 to 258.49 crores in FY 2022-23. There has been an increase of
29.64% in the revenue as compared to last year, because of which there has been a change
in return on networth.
11. Disclosure of Accounting Treatment :
In preparation of financial statements, the Company has followed the
required Accounting Standards (Ind AS) and has not deviated from treatment as prescribed
under Accounting Standards.
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