Indias economic growth in FY23 has been principally led by private consumption and
capital formation. It has helped generate employment as seen in the declining urban
unemployment rate and in the faster net registration in Employee Provident Fund. Still,
private capex soon needs to take up the leadership role to put job creation on a fast
track. Recovery of MSMEs is proceeding apace, as is evident in the amounts of Goods and
Services Tax (GST) they pay, while the Emergency Credit Linked Guarantee Scheme (ECGLS) is
easing their debt servicing concerns. The Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGS) has been directly providing jobs in rural areas and indirectly
creating opportunities for rural households to diversify their sources of income
generation. Schemes like PM-Kisan and PM Garib Kalyan Yojana have helped in ensuring food
security in the country, and their impact was also endorsed by the United Nations
Development Programme (UNDP)1.
The governments focus has rightly been on sectors such as infrastructure,
construction, and manufacturing that create jobs for workers across all skills.
Production-Linked Incentive (PLI) Schemes for various industries rolled out over the past
few years have started to bear fruit. Though still in infancy, these sectors have huge
potential to effectively kick-start the manufacturing engine for the country thus
diversifying the growth drivers for the country. Growth is expected to be brisk in FY24 on
the back of robust credit growth, positive capital investment cycle given the demand as
well as the strengthening of the balance sheets of the corporate and banking sectors RBI
expects GDP growth for FY24 to be 6.5% which will translate into general optimism in the
economy and job sentiments.
The Real Estate sector has witnessed resilient growth in the current year, with housing
sales and the launch of new houses surpassing in Q2 of FY23 the pre-pandemic level of Q2
of FY20. Information Technology-Business Process Management (IT-BPM) and the E-commerce
industry have been exceptionally resilient during the Covid-19 pandemic, driven by
accelerated technology adoption and digital transformation. The
Governments push to boost the digital economy, growing internet penetration, rise in
smartphone adoption and increased adoption of digital payments have also given a renewed
push to these industries. The introduction and piloting of Central Bank Digital Currency
(CBDC) will also provide a significant boost to digital financial services. They may lay
the framework for another generation of financial innovation.
Indias nominal gross domestic product (GDP) at current prices is estimated to be at
Rs. 232.15 trillion in
FY22. With more than 100 unicorns valued at US$ 332.7 billion, India has the
third-largest unicorn base in the world. The government is also focusing on renewable
sources to generate energy and is planning to achieve 40% of its energy from non-fossil
sources by 2030
In the Union Budget 2023-24, the Finance Ministry has announced a commitment of Rs.
79,000 crore (US$ 9.64 billion) for PM Awas Yojana, which represents a 66% increase
compared to the last year.
OUTLOOK
In the second quarter of FY 2022-23, the growth momentum of the first quarter was
sustained, and high-frequency indicators (HFIs) performed well in July and August of 2022.
Indias comparatively strong position in the external sector reflects the countrys
generally positive outlook for economic growth and rising employment rates. India ranked
fifth in foreign direct investment inflows among the developed and developing nations
listed for the first quarter of 2022.
Indias economic story during the first half of the current financial year highlighted
the unwavering support the government gave to its capital expenditure, which, in FY 2022
23 (until August 2022), stood 46.8% higher than the same period last year. The ratio of
revenue expenditure to capital outlay decreased from 6.4 in the previous year to 4.5 in
the current year, signaling a clear change in favour of higher-quality spending. Stronger
revenue generation as a result of improved tax compliance, increased profitability of the
company, and increasing economic activity also contributed to rising capital spending
levels.
Despite the continued global slowdown, Indias exports climbed at the second highest
rate this quarter. With a reduction in port congestion, supply networks are being
restored. The CPI-C and WPI inflation reduction from April 2022 already reflects the
impact. In August 2022, CPI-C inflation was 7.0%, down from 7.8% in April 2022. Similarly,
WPI inflation has decreased from 15.4% in April 2022 to 12.4% in August 2022. With a
proactive set of administrative actions by the government, flexible monetary policy, and a
softening of global commodity prices and supply-chain bottlenecks, inflationary pressures
in India look to be on the decline overall.
(Source: IBEF, CNBC, Economic Times)
1. INDUSTRY STRUCTURE AND DEVELOPMENT
The services sector is not only the dominant sector in Indias GDP, but has also
attracted significant foreign investment, has contributed significantly to export and has
provided large-scale employment. Indias services sector covers a wide variety of
activities such as trade, hotel and restaurants, transport, storage and communication,
financing, insurance, real estate, business services, community, social and personal
services, and services associated with construction. In order to enhance Indias
commercial services exports, share in the global services market from 3.3% and permit a
multi-fold expansion in the GDP, the government is also making significant efforts in this
direction.
India is a unique emerging market in the globe due to its unique skills and competitive
advantage created by knowledge-based services. The Indian services industry, which is
supported by numerous government initiatives like smart Cities, clean India, digital India
are fostering an environment that is strengthening the services sector. The sector has the
potential to open up a multi-trillion dollar opportunity that might stimulate symbiotic
growth for all nations.
The Government of India recognises the importance of promoting growth in services
sector and provides several incentives across a wide variety of sectors like health care,
tourism, education, engineering, communications, transportation, information technology,
banking, finance and management among others.
Road Ahead
Both domestic and global factors influence the growth of the services sector. An
extensive range of service industries have experienced double digit growth in recent
years, supported by digital technologies and institutional frameworks made possible by the
government. The ease of doing business in India has significantly increased for domestic
and foreign firms due to considerable advancements in culture and the government outlook.
Due to ongoing changes in the areas of lowering trade barriers, easing FDI regulations,
and deregulation, Indias services sector is poised to grow at a healthy rate in the
coming years.
Indias financial services industry has experienced huge growth in the past few years.
This momentum is expected to continue. Indias private wealth management Industry shows
huge potential. India is expected to have 6.11 lakh HNWIs by 2025. This will indeed lead
India to be the fourth largest private wealth market globally by 2028. Indias insurance
market is also expected to reach US$ 250 billion by 2025.
2. OPPORTUNITIES AND THREATS
OPPORTUNITIES:
With continuous support by the Government towards entrepreneurship (e.g. ease of doing
business), India sees an increasing number of startups and small businesses. With the
advent of SME exchange, it has become easier for SMEs to get listed. Furthermore, the
rising penetration of private equity and venture capital in Indian startups is expected to
result in increased M&As and IPOs.
Revival from Indian Equity market post lock down will revive the IPO deals and thereby
push demand of merchant bankers.
Growth in foreign direct investment and also funding by promoters in to companies will
push demand of merchant bankers for valuation assignments.
Various funding transactions push demand of merchant bankers for valuation
certifications.
THREATS:
Despite opportunities, there are significant factors presenting threats to our business
viz:
Capital Market gets affected by events such as interest rate hikes, monsoon
performance, tax concerns, other global events & domestic political events such as
interim & state elections.
Continuous downward pressure on the fees and commissions caused by heightened
competition and willingness of most players to deliver services at very low fees.
The effect of any of the adverse events on the capital market would pose a threat for
the process of capital formation and resource raising.
3. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE:
The Company has delivered a satisfactory financial and operating performance for
2022-23. The total revenue is 155.77 lakhs in FY 2022-23 as compared to 45.42 lakhs in FY
2021-22. The Profit before interest and taxes stands 155.00 lakhs for the FY 2022-23 as
against 120.73 lakhs in 2021-22.
4. OUTLOOK FOR FY 23-24
To become top Merchant Banker in India for Services like IPO, Valuation and Business
Advisory.
To provide solutions to our clients with a vision to maximize their growth by placing
the highest importance on quality, professionalism, integrity and confidentiality.
5. RISK AND CONCERN
The Companys ability to foresee and manage business risks is crucial in achieving
favorable results. Risk management at Interactive Financial Services Limited is an
integral part of the business, focusing to mitigate the adverse impact of risks on
business objectives. The Company has laid down a well defined risk management procedure
covering the risk identification, risk exposure, potential impact and risk mitigation same
through a properly defined framework.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUECY
The Company has an adequate internal control system adopted for operating procedures,
policies and process guidelines. The guidelines are well-documented with clearly defined
authority limits corresponding with the level of responsibility for each functional area.
Further, the Company has budgetary control system to monitor expenditure against approved
budgets on an ongoing basis. The Companys robust internal audit programme which works to
conduct a risk-based audit not only tests the adherence to laid down policies and
procedures but also suggests improvements in the current processes and systems.
7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The Financial performance of the company during the FY 2022-23 as compared to FY
2021-2022 is as under:
| Particulars |
2022-2023 |
2021-2022 |
% of Increase/Decrease |
| Gross Revenue from operations |
155.77 |
45.42 |
242.95 % |
| Profit Before Tax |
153.42 |
120.68 |
27.13 % |
| Profit after Tax |
120.10 |
100.10 |
19.98 % |
Operational Performance
The Company continued to focus on improving operational efficiency leading to better
returns for the shareholders. Further, the company has significantly enhanced its
operational performance by establishing prudent risk management framework.
8. MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONSHIP FRONT,
INCLUDING NUMBER OF PEPOLE EMPLOYED
Human resource practices and policies at Interactive Financial Services Limited ensure
that all employees, wherever they work, whatever their role is, are always treated
equally, fairly and respectfully. We maintain consistent and transparent diversity
policies.
Our human resource team believes in personnel management, which involves planning,
organizing, directing and controlling of the recruitment and resource management, training
& development, compensation, integration and maintenance of people for the purpose of
contributing to organizational, individual and social goals.
People power is one of the pillars of success of company. As on 31st March,
2023 the Company employs 05 employees. Going ahead, the Company aims to retain and develop
the existing employees and align their goals with the common business vision and mission.
9. THE DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
During the financial year, the details of significant change in the key financial
ratios i.e. change of more than 25% as compared to the previous year along with the
detailed explanation is summarized below on standalone basis:
| Key Financial Ratios |
F.Y. |
F.Y. |
Changes in |
Reasons for change |
|
|
|
2022-23 |
2021-22 |
% |
|
| 1. Debtors Ratio |
Turnover |
0.01 |
0.002 |
400% |
Decrease in days in receivables is due to policy of company to take
business on advance basis. |
| 2. Inventory |
Turnover |
NA |
NA |
NA |
- |
| Ratio |
|
|
|
|
|
| 3. Interest Ratio (in times) |
Coverage |
NA |
NA |
NA |
- |
| 4. Current Ratio |
6.45 |
10.55 |
-38.85% |
|
Decrease in ratio is due to proportionate increase in current
liabilities in compare to current assets |
| 5. Debt Equity Ratio (in times) |
NA |
NA |
NA |
- |
|
| 6. Operating %) |
Margin (in |
80.17% |
68.28% |
17.41% |
Due to operational activities. |
| 7. Net Profit Margin (in %) |
77.09% |
56.48% |
36.49% |
|
Due to increase in profit of the company |
10. The Return on Net Worth during the FY 2022-23 was 39.86% as compared to 33.22%
in FY 2021-22.
The increase in the return on Net Worth is mainly due to increase in profit of the
company.
11. CAUTIONARY STATEMENT
Statement made in the Management Discussion and Analysis describing the various parts
may be "forward looking statement" within the meaning of application securities
laws and regulations. The actual result may differ from those expectations depending upon
the economic conditions, changes in Government regulation and amendments in tax laws and
other internal and external factors.
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