INTRODUCTION
Indias textile industry plays a vital role in the countrys economy and export sector.
It encompasses a wide range of activities, from traditional hand weaving to modern textile
mills, and is anticipated to experience significant growth in the foreseeable future.
India has earned a reputation as a prominent manufacturing hub for textiles and apparel
due to its rich textile heritage, skilled craftsmanship, and cost-effective labour. As the
sixth-largest exporter of textiles and apparels worldwide, Indias technical textiles
segment alone is valued at approximately USD 16 Billion, constituting around 6% of the
global market.
Notably, India is the second-largest producer of man-made fibre (MMF) globally,
trailing only behind China. Key export destinations for Indian textiles and apparel
include the United States, European Union (EU-27), and the United Kingdom, accounting for
roughly 50% of Indias exports in this sector. In terms of global trade in textiles and
apparel, India holds a 4.6% share. The industry also offers significant employment
opportunities, directly employing over 45 million people and providing jobs for
approximately 100 million individuals in related industries. Projections indicate that the
Indian textile industrys market size is estimated to reach USD 190 Billion by 2025-26, a
substantial increase from USD 99 Billion in 2021-22.
DRIVING FORCES
The growth of the Indian textile industry is being propelled by multiple factors. These
include a notable increase in the demand for natural fibres, the growing adoption of
digital textile printing, the availability of raw materials and a skilled workforce,
favourable demographics, and extensive government support. Demographic factors, such as a
rising youth population, increasing disposable incomes, rapid urbanization, and improving
standards of living, are contributing to the industrys success. Additionally, the
industry is benefiting from the trend of omnichannel retailing in the apparel and textile
sector, with online sales anticipated to play a significant role in the industrys future
growth.
The Ministry of Textiles is actively promoting private sector engagement in the
industrys advancement through different Public-Private Partnership initiatives. Moreover,
there is a notable transition occurring within the industry towards sustainable resources,
driven by increasing consumer preferences for environmentally friendly options. Key market
players are also embracing emerging technologies and cutting-edge equipment to enhance
efficiency and productivity in the coming years.
GOVERNMENT INITIATIVES
The Indian Government is proactively engaged in promoting the expansion and progress of
the textile sector in the country through the implementation of various impactful schemes.
These initiatives include the Production Linked Incentive (PLI) Scheme, the Remission of
Duties and Taxes on Exported Products (RoDTEP) Scheme, Make in India, Mega Textile Parks
Development, and the National Technical Textiles Mission, among others. These schemes are
designed to facilitate and incentivize investments in the textile industry. Moreover, the
Governments ongoing efforts to enhance the ease of doing business by reducing compliance
burdens and costs will attract foreign investments, thereby further benefiting the textile
sector.
• The Scheme for Capacity Building in Textile Sector (SAMARTH) was created
to meet the proficient workforce needs of the textile industry. The scheme was developed
in line with the Skill India initiative and aligned with the Ministry of Skill Development
and Entrepreneurships skilling programme framework. The implementation of SAMARTH has
been approved until March 2024.
• The Amended Technology Upgradation Fund Scheme (ATUFS) was launched in
January 2016 to promote ease of doing business in India, generate employment, and
encourage exports through the Make in India initiative. The scheme provides a
credit-linked Capital Investment Subsidy (CIS) to units in the textile sector (excluding
spinning) for the purchase of benchmarked machinery.The goal is to achieveZero effect and
Zero defect in manufacturing.
• The Pradhan Mantri Mega Integrated Textile Region and Apparel (PM MITRA) Scheme
was approved by the Indian Government to establish seven textile parks in greenfield and
brownfield sites with an outlay of Rs. 44.45 Billion over a period of seven years, up to
2027-28. The goal of PM MITRA is to enhance the competitiveness of the Indian textile
industry, attract significant investment, and boost employment generation. The most
recent edition of the scheme aims to build a total of 65 textile parks in India.
• The Production Linked Incentive (PLI) Scheme has been introduced to
promote the production of MMF apparel, MMF fabrics, and technical textile products in
India. The goal of the scheme is to create 60-70 global players, attract fresh investment
of approximately Rs. 190 Billion, and generate almost 750,000 new employment opportunities
in the country.
• The Rebate of State and Central Taxes and Levies (RoSCTL) has been
approved by the Indian Government for the extension of its implementation until March
31,2024. The rates applicable to apparel/garments, and made-up exports will remain
unchanged, as issued by the Ministry of Textiles. This decision aims to provide a tax
rebate on outbound shipments to garment exporters, thereby boosting the competitiveness of
the labour-intensive textile industry.
• Free Trade Agreement: The IndAUS ECTA is expected to boost Indias
textile and apparel exports significantly, with projections indicating an increase to USD
1100 Million within the next three years. This agreement is poised to positively impact
the Indian textile industry by facilitating increased trade between India and Australia.
Industry Outlook
• The outlook for the Indian textile industry seems promising, with strong growth
prospects in both domestic consumption and export demand. The industry is anticipated to
experience robust growth, driven by robust domestic consumption, growing export demand,
and the rapid digitisation of consumers and brands post-Covid-19 pandemic. Over the past
decade, the retail sector has undergone rapid progress due to increasing consumerism and
disposable income. This growth has been further fuelled by the entry of various
international players into the Indian market.
• The China+1 strategy presents a significant opportunity for the Indian textile
industry to regain its position as a top exporting economy. With the domestic economy
improving and exports increasing, the industry is expected to experience substantial
growth in domestic production to meet the rising demand. As a result, capital expenditures
and investments in the sector are projected to increase, leading to an improvement in
productivity and industry competitiveness. Indias favourable demographics and industry
dynamics further enable the country to establish itself as a global textile hub.
RISKS & CONCERNS
Management Discussion and Analysis mainly comprise the statements which may, inter
alia, involve predictions based on perceptions and may, therefore, be prone to risks and
uncertainties. It is the sum of the Companys expectations, beliefs, estimates and
projections which may be forward looking or depressing within the meaning of applicable
laws and regulations. The actual results could differ materially from those expressed
herein specifically or impliedly. The shareholders are cautioned to keep this in view in
conjunction with the Companys financial statements.
CORE BUSINESS AND PRODUCTS
The core business of the Company is manufacturing and marketing of spun synthetic
blended yarn, wool and wool mix yarn, spun synthetic and worsted fabrics and cotton &
linen fabrics besides readymade garments. The Company also produces shirting and technical
fabrics. Tesca Textiles and Seats Components (India) Private Limited, the Joint venture
Company, is producing automotive fabrics.
OUTLOOK
Your Companys future growth is built on two parallel growth drivers viz., domestic
consumption of fabrics & garments and large global opportunities in textiles and
clothing. Given the opportunity that textile as a sector is presenting, we are looking to
steer the company in the direction of growth and achieving larger scale of business.
Keeping this in mind we are strengthening our leadership team within the organisation. In
line with our future growth plans, the promoters and the board have collectively started
tracking the business from 3 divisions perspective - namely, Yarn, Fabric and Garments.
This strategic move aims to improve realizations and enhance the internal performance of
each segment. We have appointed three separate business unit heads for our yarn, fabrics,
and garment divisions.
PROFESSIONAL MANAGEMENT TEAM CFO:
Ms Kavita Gandhi has been appointed as our CFO. She is a Chartered Accountant and has
over 30 years of experience in the field of Accounts, Taxation, and Finance.
YARN DIVISION:
Mr. Vireshwar Joshi will head the yarn division. He is B. Text. (Engg.) with MBA
(Finance and Marketing), DCA (Computer Application) and he has 30 years of experience in
the textile industry across various companies in India, Nigeria and Uganda. He has
demonstrated ability to manage large scale manufacturing operations with a focus on
improving efficiency and productivity.
FABRIC DIVISION:
Mr Shailendra Pandey will head the fabrics division. He is M.Sc. in Textile Chemistry
and has done MBA in Productions and Operations. He holds over 27 years of experience in
the textile manufacturing industry including P/V Suiting, automotive textiles, worsted
fabric, and home furnishing.
GARMENT DIVISION:
The garments division will be headed by Mr Rahul Bhaduria. He is a graduate in Garment
Manufacturing Technology from NIFT and has over 24 years of experience in the industry.
CHIEF TECHNOLOGY OFFICER
To further strengthen our core leadership team, we have on board Mr Devendra Pratap
Misra, Chief Technology Officer. He has over 29 years of experience in the field of IT
with specialization in SAP, ISO/QMS, EMS, TQM and 5S. He holds a MSc in Math; MCA and he
is an LLB.
CHIEF INTERNAL AUDITOR
Internal Audit function is led by Mr. Yugal Kishore Agarwal Chief Internal Auditor. He
is vastly experienced in the entire gamut of Internal Audit, Investigations and Controls.
HUMAN RESOURCE
Mr Swapnil Shrivastava is our DGM for Corporate Human Resources. He has over 15 years
of experience across all domains of HR such as recruitments, HR/IR systems and audit, HRIS
implementations, HR strategy and Policy designing.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE AND
INTERNAL CONTROL SYSTEMS & ADEQUACY
The operating performance of the Company has been detailed in the Directors Report
under the heads Financial Statements and Operations and State of Affairs.
During the year that went by, in the wake of the pandemic, the West and EU have adopted
a China+1 strategy, leading to a decline in demand for textiles produced in China.
Consequently, India has emerged as one of the favourable destinations for textile
manufacturing outside of China. Indias share in the textile market is projected to
increase in the coming years, with textile exports from India expected to reach
approximately ~20 billion. Recognizing this trend, the Indian Government has introduced
initiatives such as the PLI scheme for textiles and the PM MITRA initiative. As part of
these efforts, the establishment of 7 mega textile parks in India, with a combined
investment of Rs. 70,000 crores, will further incentivize manufacturing and boost exports.
We have observed a rise in demand for our textiles from global customers because of these
developments. Hence, the future of the textile industry in India appears promising.
The profit before interest, depreciation, and tax (PBIDT) during 2022-23 has been Rs.
213 crore as against Rs. 139 crore during 2021-22. The profit before depreciation and tax
(PBDT) has been Rs. 181 crore as against Rs. 114 crore during 2021-22. The Net Profit
earned during the year is Rs. 113.21 Crores as against Rs. 45.35 crores in 2021-22.The
export sales contribution increased from 45% in FY22 to 48% in FY23 showing an increase of
35% whereas the domestic sales increased by 19%.
The major reasons behind the same are a) Low base effect as 2 quarters of FY 21-22 were
impacted by COVID and hence, demand was lower. b) Pent up demand in FY23, once normal life
returned post covid. c) The Garment increase of 143% in Export and 58% in Domestic was on
account of larger orders from international brands.
A detailed note on internal control systems and adequacy has been mentioned in the
Boards Report.
DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
As required, the following are the key ratios having significant changes i.e. change 25
% or more as compared to the previous financial year:
Key Ratios
Particulars |
31st March 2023 |
31st March 2022 |
Changes in % |
Current Ratio |
1.53 |
1.49 |
2.91 |
Debt-Equity Ratio |
0.73 |
0.65 |
12.18 |
Interest Coverage Ratio |
2.41 |
1.72 |
40.22 |
Operating Profit Margin Ratio |
0.10 |
0.06 |
62.00 |
Inventory turnover ratio |
5.06 |
5.01 |
0.93 |
Debtors turnover ratio |
8.85 |
9.86 |
(10.21) |
Net profit margin ratio |
0.07 |
0.04 |
89.23 |
Return on Net Worth |
0.19 |
0.14 |
35.45 |
Please refer to Note No. 54 of Standalone Financial Statement for the reason of more
than 25% variance.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS
FY 2022-23 has been an exceptionally good year for the company performance wise, and HR
function played their part in providing the resources across the divisions. Below is a
staff count difference between March 2022 and March 2023
Location |
March 2022 |
March 2023 |
Banswara |
1,017 |
990 |
Daman |
205 |
255 |
Mumbai |
94 |
110 |
Surat |
121 |
145 |
TOTAL |
1,437 |
1,500 |
The industrial relations in all units of the Company continue to be cordial. The
skills, experience and passion of our people facilitate deeper customer understanding and
engaging relationships and strengthen our brand value as a preferred employer. We continue
to step up efforts to accelerate our value-based growth strategy and the overall
development of human capital. We nurture our people by investing in their empowerment
through learning and development, wellness, and safety besides providing workplace
facilities.
Over the year, many new HR initiatives have been implemented. One of the key activities
carried out during the year was Organization Restructuring, with a view of divisional
segmentation, with each division being professionally managed by a dedicated Business
Head, who shall be responsible for the performance of the entire division. Additionally,
all the common functions will be managed by other senior officials. Hiring of the senior
officials -"CFO" and"Business Head, Yarns", carried out, joining us in
Q1 of FY 2023-24. CAUTIONARY STATEMENTS
Statements in this Management Discussion and Analysis, describing the Companys
objectives, projections, estimates, expectations, or predictions, may be "forward
looking statements" within the meaning of applicable laws and regulations. Actual
results could differ materially from those expressed or implied. Important factors that
could make a difference to the Companys operations include raw material availability and
prices, cyclical demand and pricing in the Companys principal markets, changes in
Government regulations, tax regimes, economic developments within India and the countries
in which the Company conducts business and other incidental factors.
For and on behalf of the Board of Directors
|
Sd/- |
|
Rakesh Mehra |
Place: Mumbai |
Chairman |
Dated: 15th May, 2023 |
DIN:00467321 |
+91-9892691696
