The Company is principally engaged in starting out as a fledgling ACSR conductor
manufacturing facility in 1970. Diamond Power Infrastructure Ltd. (DPIL) has emerged as
Indias largest and only integrated manufacturer of power transmission equipment. Our
world class manufacturing facilities, a vastly experienced team of professionals and the
ability to pioneer newer technologies have earned us a leadership position in the power
transmission & distribution sector in India.
Global Market Overview:
The global wire & cable compounds market grew from $11.32 billion in 2022 to $12.58
billion in 2023 at a compound annual growth rate (CAGR) of 11.1%. The Russia-Ukraine war
disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in
the short term. The war between these two countries has led to economic sanctions on
multiple countries, a surge in commodity prices, and supply chain disruptions, causing
inflation across goods and services, and affecting many markets across the globe. The wire
& cable compounds market is expected to grow to $18.65 billion in 2027 at a CAGR of
10.4%.
The growing construction sector is expected to propel the growth of the wire and cable
compound market going forward. The construction sector refers to the sector of industry
and trade that deals with creating, maintaining, and repairing infrastructures. Wire and
cable compounds are used in the construction sector to provide wires with a high level of
insulation and to stop moisture from getting inside power transmission or
telecommunication cables. For instance, in January 2022, according to Global Construction
Perspectives and Oxford Economics, UK-based academic economists, by 2030, global
construction production is expected to increase by 85% to $15.5 trillion, with China, the
United States, and India taking the lead and contributing 57% of the increase. Over the
next 15 years, the US construction market is going to expand more quickly than Chinas.
Therefore, the growing construction sector is driving the growth of the wire & cable
compound market.
India Outlook:
The consumer electrical industry consisting of wires and cables and FMEGs was estimated
at approximately 161,500 million in Fiscal 2022 and is expected to grow at a CAGR of
approximately 11% till Fiscal 2027 to reach a market value of approximately 266,500
million. India Cable Management Market size is projected to grow at a CAGR of 11.2% during
2022-2028. The Company is positive about the growth prospects of the Wires & Cables
(W&C) industry in the near future.
The rapid growth in transport infrastructure of the country including railways, metros,
tunnels, bridges and roads along with the rising power generation in the country which
would also support the exponential growth the country is witnessing in its digital
infrastructure, positions India as the most lucrative market for cable management as it
would hinder the entanglement of wires and cables that would connect and support the
overall infrastructure of the country.
Furthermore, Indian railways which is now 80% electrified along with rising metro lines
would have a significant contribution in the market expansion anticipated for coming
years. In addition to it, as the country is moving forward towards Industry 4.0 with a
fast pace as it is well supported and compatible with the Indias robust digital
infrastructure, cable management would soon be applied in smart factories to prevent
entanglements of wires and cables that are essential to connect the cyber-physical systems
and their seamless functioning.
The market is expected to be driven by factors such as the growth in renewable power
generation in India, the expansion and revamping of Transmission & Distribution
infrastructure in India, and increasing investments in metro railways. Increased
investments in smart grid projects and up-gradation of power transmission and distribution
systems are also estimated to propel the demand for wires & cables globally.
Significant investments in smart grid technology have resulted in an increasing need for
grid interconnections. Additionally, rising investments in underground cables and the
growth of renewable energy are set to escalate the adoption of wires and cables. Wire and
cables demand is directly dependent on the growth of the manufacturing industry and
infrastructure in the power, telecommunications, residential and commercial sectors. Thus,
the governments initiatives on various fronts like power, housing, infrastructure and
digitization are sure to generate a lot of business for the wire and cable industry in the
foreseeable future. Likewise, with the governments emphasis on pushing renewable energy
to the forefront, the industry is now looking forward to supplying cables for solar and
wind power applications in addition to oil and gas, railways and other specialized
segments. Wires and cables are deployed across an extensive range of applications which
include consumer electronics, utilities, material handling, automotive, and
entertainment/leisure amongst others. Growing inclination toward the expansion of
prevailing grid networks coupled with lack of efficient electric infrastructure will
propel the industry outlook over the forecast timeline.
The Clean energy is being increasingly to replace fossil-based energy solutions.
Electrical Vehicles (EVs) being one of them. It has been a certain time since the
discovery of the technology and its application is gaining momentum worldwide. The Market
size of
EVs is growingly very rapidly, backed by government subsidies and initiatives for
faster adoption of EVs. It is projected a Year-on-Year CAGR of 49% for the EV market in
India during 23-30. The Indian market is expected to record a conservative sale of 1 cr.
units per annum by 2030. As of January, 23,2023, India had 5354 public EV charging
stations and 20.65 lakh EVs. Hence the ration of EV stations to the number of EVs was
1:393, which is very high as compared to other countries. India is likely to have nearly
10,000 public charging stations by end of 2025, however to achieve its electrification
targets, the Country may require nearly 20.5 lakh charging stations by 2030. This
situation presents an opportunity as well as a challenge for the industry. While the scope
of development is huge for vast capacity expansion and addition, the requirements need
expedition in efforts and investments. The Country requires the government and the
industry to create an ecosystem by not only supplying the infrastructure but planning the
development and integration of the same in a way that the current sporadic and
concentrated pattern could be diffused across the nation. The Wire and cables industry
needs to buckle up itself for a huge demand needs to be catered, from supplying the
construction of EVs infrastructure to its integration within the National Grid of India.
The manufacturing industry too is experiencing robust growth due to growing capacity
utilization, the PLI scheme, and the ‘Make in India initiative, generating more
business opportunities for Wire & Cable players.
Company Outlook:
A Brand DICABS is a familiar name in the industry and owing to our past legacy and we
plan to gain energy from the same. We are not only focusing on continuing the qualitative
attributes that helped us the first time but also looking to reconnect with our past
partners and customers. DICABS has been fortunate to have a strong connection with major
industrial players because of qualitative products matching with the quantitative
requirements. The factory, being located in the State of Gujarat which is largest
industrially growing state and has immense opportunities in Solar and Wind power, has
mammoth demand of various products of Company. The Indian Government vision of unified
nationwide smart grid, one that connects power generated from various resources and
transmits it across the nation through an interconnected grid, is already in place. The
Company is a major player in Power industry for more than 15 years. Our USP is our quality
which is paramount for any businesss success in the current scenario and step with the
infrastructural development of the Country. The First Quarter results of the financial
year 23-24 ended with profits which itself proves that the future of the Company will be
bright and will meet the expectations of all Stakeholders.
Opportunities and Threats:
The new Management of the Company is well equipped with the vision to take Company
towards high growth with optimum utilization of resources of the Company in proper manner.
New management is taking diligent efforts to boost the capacity utilization of the Company
which remained under-utilized/ unutilized since inception of takeover due to absence of
working capital. The Company is in the process of hiring qualified professionals to
stimulate the vision of new management towards the Company. The Company is well placed to
encash the opportunity in terms of ease of doing business and the relaxations provided by
the government which will accelerate the business of the Company in terms of the revenue.
The Company had been into NCLT under CIRP process and there were no business operations
almost for half a decade. The new Management of the Company is trying to streamline the
business activities of the Company.
Strengths:
Strong demand for power cables in India due to increasing infrastructure development
and industrialization. Established reputation and brand image/ recognition in the market.
Ability to leverage government initiatives such as "Make in India" and
"Digital India" to increase business opportunities across the country. Presence
of raw materials such as copper and aluminum in India, reducing dependence on imports.
Weaknesses:
Strong competition from domestic and international players in the market.
Commodity Pressure- Volatility or Steep Increase in commodity prices lead to increase
in Cost of production and diminishing profit. Limited access to advanced technology and
equipment, leading to potential quality issues. Power disruptions: Any impact on power
distribution and electricity delivery can impact the demand for electrical products.
Availability of stable and quality power supply continues to be an important factor for
the industrys growth prospects.
Geopolitical crisis: Volatility in the commodity and foreign currency markets may
impact raw material availability due to geopolitical challenges in different geographies
around the world.
Opportunities:
Growing demand for renewable energy technology such as wind and solar power, which
require power cables for transmission. Increasing government investment in infrastructure
development projects such as smart cities, highways, and railways. Growing demand for
electric vehicles, which require charging infrastructure and power cables. Potential to
expand internationally to new markets in Asia and Africa. Potential for government
incentives for businesses that invest in research and development.
Threats:
Increasing competition from low-cost manufacturers in China and other countries.
Potential for changes in government policies, geopolitical situation and regulations
that could impact the industry. Technological disruption from alternative forms of energy
transmission such as wireless power transmission. Potential for economic downturns or
global crises that could impact demand for power cables. Brand Positioning impact due to
the competitors.
Business, Operations & Financial Performance
The Indian Wire &Cable industry is estimated to have grown in low teens in FY23 to
H680-730 billion in size, contributing to 40-45% of the Indian electrical industry.
Sectors like Power, Railways, Infrastructure, Oil & Gas, Telecom, Real Estate,
Renewables, Defence, Automobiles, etc. are the largest demand drivers for the industry.
The organised players command a lions share of the market, at around 70%, while
unorganised players largely dominate the rural geographies.
Megatrends driving growth in the W&C industry The Indian W&C market is
projected to grow to H900-950 billion by FY26, on the back of several megatrends.
Discussion on financial performance
Service Income |
|
|
( in Lakhs) |
Nature of Services |
FY 2022-23 |
FY 2022-21 |
Change |
Revenue from operations (description of business activity) |
1,545.64 |
- |
1,545.64 |
Other income |
26.29 |
5.00 |
21.29 |
Total Business Income |
1,571.93 |
5.00 |
1,566.93 |
Particulars |
For 2022-23 |
For 2022-21 |
Revenue From Operation |
1,545.64 |
- |
Earnings before Depreciation, Interest, Taxes & Amortization
(EBDITA) |
(2,339.01) |
(278.00) |
Earnings before Depreciation, Taxes and Amortization (EBDTA) |
(2,404.17) |
(969.62) |
Profit before tax (PBT) |
(4287.86) |
(2540.33) |
Profit after tax (PAT) |
(4287.86) |
(2540.33) |
Further, the Companys Other Income increased from 26.29 Lakhs to 5.00 Lakhs whereby
Other Expense has Increased from 269.32 Lakhs to 1,775.56 Lakhs. Also, the Depreciation
has Increased from 1,570.42 Lakhs to 1,883.69 Lakhs.
Operating Expense:
Staff cost
Employees Remuneration & Benefits has marginally increased from 13.69 Lakhs to
302.57 Lakhs and this staff cost also includes Directors Remuneration.
Financial charges
Interest & Financial Charges have decreased from 691.91 Lakhs to 65.16 Lakhs as
compared to previous year which shows decrease of 90.58% in actual terms which is in-line
with reduction in debts and the Companys Operating Expenses have also increased from
973.92 Lakhs to 3976.10 Lakhs which is in line with increase in Operating revenue.
Details of significant changes (i.e., change of 25% or more as compared to the
immediately previous financial year) in key financial ratios and any change in Return on
Net Worth, along with detailed explanations thereof. NOT APPLICABLE
Segment wise performance:
Since, the Company operates its business under one segment only, the report on segment
wise performance is not furnished.
Risk and Concern:
The wire and cable industry has vast potential in growth in coming years but it has
some challenges also, the increasing price rise and competition from Chinese imports. The
wire and cable industry is experiencing volatility in raw material prices, as the price of
copper continues to increase, profit margins are squeezed and they become uncompetitive in
the international market. Country is experiencing an all-time high price of fuel its
direct impact on domestic transportation, in result wire and cable transportation has
increased. Also, a large section of the industry is still unorganized; there is a lack of
quality product offerings from these players due to non-compliance with the product
guidelines. Slowdown in the Indian economy due to global developments could adversely
impact growth in the short-term envisage a risk
The new management of the Company shall review the existing risk management policy and
lay down defined risk management mechanism covering the risk mapping and trend analysis,
risk exposure, potential impact and risk mitigation process. Management is yet to set up
exercises to be carried out to identify and evaluate, manage and monitor various risk.
Human Resources
The Company trust & believes that employees are its most valuable assets and
continuously strives to help them to realize their full potential. At DICABS, Human
Resource function looks after employee recruitment, training, performance management,
emotional and mental well-being, financial wellness, and stress management. Additionally,
for the past 9 months, the Company is in the process of finalizing the Key Personnel team.
All Senior professionals are having a vast industrial experience for around 20 -25 year
from the core areas of operations. The Company believes in employee empowerment and works
to create a happy and healthy work environment. People have been and will continue to be
the Companys core strength. As this is being a first year after the Change of Management,
the Company has its thrust to do a lot work for the wellbeing of the employees of the
Company.
Investors Update
The Company was admitted in Corporate Insolvency Resolution Process (CIRP) on 24th
August, 2018. The Honble National Company Law Tribunal (NCLT), Ahmedabad bench, vide its
order dated 20th June, 2022 approved the Resolution Plan submitted by the Successful
Resolution Applicant, i.e., New Management of the Company.
A new Board of Directors of the Company was constituted on 17th September, 2022, being
a Trigger date and a new management was put in place. As a good corporate governance
practice, it has been decided to comply with the provisions of Companies Act, 2013 and the
Securities and Exchange Board of India (LODR) Regulations, 2015.
After taking over the new Management of the Company, a First Annual General meeting of
the Company was held on 14th December, 2022. The necessary compliance of the same were
filed with the Ministry of Corporate Affairs, The Bombay Stock Exchange Limited and The
National Stock Exchange Limited.
In pursuance of the NCLT Order dated 20th June, 2022, the Company has filed the
necessary Listing application with both the Stock Exchanges for Reduction of Existing
Share Capital from Rs. 269.71 Cr. To Rs. 2.69 Cr. (2697106 Equity Shares of Rs. 10 each).
The Company has received the in-principal approval from the National Stock Exchange
Limited and Bombay Stock Exchange Limited vide their letters dated 16th March, 2023 and
2nd June, 2023, respectively. The Corporate Actions of depositories namely NSDL and CDSL
are also completed.
Further the Company has also filed the necessary Listing application with both the
Stock Exchanges for Listing of New 50000000 Equity shares of Rs. 10 each, aggregating to
Rs. 50 Crores, allotted to the new promoters of the Company in pursuance of the NCLT order
dated 20th June, 2022. The said applications are pending for in-principal approval from
both the Stock Exchanges.
|
For and behalf of the Board of Directors |
|
Maheswar Sahu (Retd IAS) |
Date: 29th July, 2023 |
Chairman |
Place: Ahmedabad |
DIN: 00034051 |
+91-9892691696
