Global economy
The global economy has endured a period of turbulence and instability over recent years, as a result of pandemic, trade tensions and geopolitical confrontations combined with rising inflation. Pivoting to CY23, the global economy finds itself confronting a set of challenges that feel both familiar yet unprecedented.
The IMF predicts that the global economic growth will decelerate from 3.4% in CY22 to 2.9% in CY23, before experiencing a modest recovery of 3.1% in CY24. This slowdown can be attributed to a widening divergence in growth rates between advanced and emerging economies, coupled with tightening financial conditions and a significant rise in food and energy prices. In addition, persistent inflation and the decoupling of the worlds two largest economies are also contributing to the economic downturn. However, there are reasons to remain optimistic. Central banks across the globe are expected to signal interest rate cuts, which is expected to result in a sustained recovery of asset prices and the economy by the end of CY23.
Despite these persistent headwinds, the global economy has demonstrated remarkable resilience towards the end of 2022, dispelling the apprehensions of a protracted downturn. In addition, a delightful surprise has emerged in several economies. The unforeseen strengthening of real GDP; driven by the remarkable resilience of private consumption, investment and favourable fiscal stimulus, has fortified economic growth. Tight labour markets and pent up demand for services have created a unique opportunity for households to capitalise on their savings, while business investment has further consolidated this expansion, signifying a growing sense of confidence in future prospects.
Additionally, it is also noteworthy that the energy markets have demonstrated remarkable agility in responding to the shock of Russias invasion of Ukraine, thus propelling the growth momentum forward. In summary, while challenges loom over the global economy, the strength demonstrated by key economies in the face of these challenges inspire confidence that will lead to achieving sustainable growth in the years ahead.
Indian economy
Indias economy has been on a remarkable upswing, with a projected growth rate of 7% (in real terms) for FY23. Despite the challenges posed by the COVID-19 pandemic, conflict between Russia and Ukraine, and Central Banks across economies responding with synchronised policy rate hikes to curb inflation, India continues to be projected as the fastest-growing major economy by agencies worldwide.
The factors driving this economic growth include a surge in credit growth to the Micro, Small, and Medium Enterprises (MSME) sector, which has averaged over 30.5% between January and November, 2022. Additionally, the capital expenditure of the Central Government rose by 63.4% in the first eight months of FY23, further driving economic growth. In addition, the rebound in private consumption, supported by a rebound in contact-intensive services such as trade, hotels, and transport, has contributed to Indias growth in FY23.
In addition to these factors, Indias economic growth has been driven by capital formation, generating employment as seen in the declining urban unemployment rate and in the faster net registration in the Employee Provident Fund. The countrys vaccination drive involving more than 2 billion doses has also helped lift consumer sentiments, prolonging the rebound in consumption. As Indias private consumption and capital formation continue to drive growth, the country is poised to embark on a dynamic cycle of credit disbursal and capital investment in FY24. The expansion of public digital platforms, along with path-breaking measures such as PM GatiShakti, the National Logistics Policy, and the Production-Linked Incentive schemes, are set to boost manufacturing output and further propel the economy forward.
With a strong focus on innovation and sustainable development, India is set to spearhead the global economic recovery and emerge as a leading player in the international arena. Its unwavering commitment to progress and growth will continue to inspire and propel the nation towards greater heights of prosperity and success.
Global EV Trends
Overview
In 2022, electric car sales achieved yet another remarkable milestone, setting a new record despite facing challenges such as supply chain disruptions, macro-economic uncertainties, geopolitical tensions and soaring commodity and energy prices. Surprisingly, this growth occurred amidst a global contraction in car markets, with total car sales dipping by 3% compared to 2021. However, the electric car segment, comprising both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), defied the odds and surpassed 10 million units sold, representing a remarkable 55% increase from the previous year.
The speed at which electric car sales have surged is truly astonishing. In just five years, from 2017 to 2022, sales have increased from around 1 million to over 10 million. Comparatively, it took, from 2012 to 2017, for electric vehicle sales to grow from 100,000 to 1 million, underscoring the exponential nature of their growth. As a result of this phenomenal growth, the share of electric cars in the total car sales market spiked from 9% in 2021 to an impressive 14% in 2022, marking a tenfold increase in their market share since 2017.
The number of electric cars on the road also soared, with over 26 million electric vehicles traversing the worlds streets in 2022, a substantial 60% increase compared to 2021.
The year 2022 showcased the dominance of the electric vehicle market, marking a phenomenal 55% growth compared to 2021. Notably, China played a significant role in driving this global growth, with sales in the country surging by an impressive 80% and contributing to 60% of the overall global growth. Meanwhile, Europe continued to exhibit substantial growth, with a 15% increase, and the United States witnessed accelerated growth at 55%.
The prevalence of electric cars in China is notable, as it now houses almost half of the worlds electric vehicles, with 13.8 million units out of the global total of 32.9 million. Financially, the global spending on electric cars hit a staggering USD 425 billion in 2022, marking a significant 50% increase from the previous year. This substantial investment further reinforces the continued interest and confidence in the electric car market.
Industry Trends
• Electric car sales break new records with momentum expected to continue through 2023: Over 2.3 million electric cars were sold in the first quarter, about 25% more than in the same period last year
• Landmark EV policies are driving the outlook for EVs closer to climate ambitions: The EU and the US have passed legislation to match their electrification ambitions
• As spending and competition increase, a growing number of more affordable models come to market:
A growing number of new entrants, primarily from China but also from other emerging markets are offering more affordable models; The number of available electric car models reached 500 in 2022, more than double the options available in 2018.
• EV supply chains and batteries gain greater prominence in policy-making: EV supply chains are increasingly at the forefront of EV-related policymaking to build resilience through diversification
Source: IEA
Global Smart Meters
A smart meter is an advanced electronic device designed to record crucial information related to electric energy consumption, such as voltage levels, current, and power factor. It plays a pivotal role in providing consumers with a clearer understanding of their energy usage patterns while enabling electricity suppliers to monitor the system efficiently and accurately bill their customers. The global smart meters market is projected to reach approximately USD 23.1 billion by 2023, with an expected Compound Annual Growth Rate (CAGR) of 9.4%, propelling it to a size of USD 36.3 billion by 2028.
Smart meters have been steadily gaining traction worldwide, integrating into metering systems across different regions. Notably, around 68% of metering systems in the USA have transitioned to smart meters, while the EU and Canada account for approximately 50% of the market.
In Australia, about 25% of metering systems have adopted smart meters. However, in India, smart meters make up only 1.5% of the market, indicating significant room for improvement. Government policies across the globe are actively promoting Advanced Metering Infrastructures (AMIs) to drive automation and technological advancement, presenting exceptional growth opportunities, especially in markets with limited smart meter penetration.
Source:
1. Australias installed smart electricity meters base at 3.3 million out of a total 13.6 million meters - SMI
2. USAs estimated installed household smart electricity meters base at 107 million, representing 75% of US households - SMI
3. Europes installed smart electricity meters base at 150 million, representing a 49% penetration rate - SMI
4. Indias smart meters base at 3.7 million, out of the Government of Indias mission to install 250 million meters by 2025 - Powerline
5. Canadas installed smart electricity meters base is estimated to be 6.2 million out of 12.4 million households, indicating about 50% penetration - Energyrates
One of the persistent challenges faced by the power distribution and supply industry is efficiently matching demand with supply. Smart electricity meters are expected to bridge this gap, significantly enhancing industry efficiency. These smart meters offer consumers the advantage of timely failure detection, faster service accommodations, and accurate billing. For power companies, these meters reduce the reliance on manual meter readings, limit equipment and maintenance costs, and enable quicker restoration and maintenance processes. Moreover, they empower companies to track and mitigate power loss and theft effectively.
Furthermore, smart meters enable the integration of distributed energy resources and energy storage, facilitating effective supply management for specific uses like residential electric vehicle (EV) charging. Such automation leads to improved operational efficiencies, greater grid resilience, and precise meter readings. Anticipating the future, it is expected that the growth of the smart metering industry will be fueled by the development of smart grid networks and regulatory initiatives. These steps not only encourage the replacement of outdated metering systems with modern technologies but also contribute to the overall energy supply and consumption efficiency. In the long run, consumers can adjust their energy usage based on time-based pricing models, while supply and distribution companies can optimize capacity utilization, ultimately resulting in rationalized rates and enhanced resource management.
Source: Markets and Market
Indian Smart Meters Landscape
Revamped Distribution Sector Scheme: Reforms-Based and Result-Linked
The government of India has approved the Revamped Distribution Sector Scheme (RDSS) to help DISCOMs improve their operational efficiencies and financial sustainability by providing result-linked financial assistance to DISCOMs to strengthen supply infrastructure based on meeting pre-qualifying criteria and achieving basic minimum benchmarks. The scheme has an outlay of ^ 3,03,758 Crores over 5 years i.e. FY 2021-22 to FY 2025-26. The outlay includes an estimated Government Budgetary Support (GBS) of ^ 97,631 Crores.
REC and PFC have been nominated as nodal agencies for facilitating the implementation of the scheme.
The scheme aims to meet the following objectives:
• Reduction of AT&C losses to pan-India levels of 12-15% by 2024-25.
• Reduction of ACS-ARR gap to zero by 2024-25.
• Improvement in the quality, reliability and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector.
The Scheme has the following components:
• Part A - Financial support for Prepaid Smart Metering & System Metering and up-gradation of the Distribution Infrastructure.
• Part B - Training & Capacity Building and other Enabling & Supporting Activities.
Learning from the experience of previous schemes, the Revamped Distribution Sector Scheme has been developed to address state-specific needs. Some of the salient features are as below:
• Prepaid Smart Metering to be prioritized for
? 500 AMRUT cities, with AT&C Losses > 15%
? All Union Territories
? MSMEs, Industrial and Commercial consumers ? All Government offices at the Block level and above ? Other areas with high losses
• Prepaid Smart metering for remaining consumers and areas is proposed to be taken up by the respective DISCOMs in a phased manner.
• Prepaid Smart metering and system metering are proposed to be implemented through PPP on TOTEX (CAPEX+OPEX) mode.
• Part A of the scheme also provides financial assistance to DISCOMs for infrastructure creation and undertaking reforms to achieve the desired results towards improvement in operational efficiency and financial sustainability.
• Provision of feeder segregation for unsegregated feeders. Thereafter these feeders are to be solarized under KUSUM - leading to cheap/free daytime power for irrigation.
• The pre-qualifying criteria need to be mandatorily met with the DISCOMs before they can be evaluated based on the Result Evaluation Matrix. Thereafter, performance based on Result Evaluation Matrix shall form the basis for the release of funds under the scheme.
• For Prepaid Smart metering, a grant of ^ 900 or 15% of the cost per consumer meter (whichever is lower), shall be available for "Other than Special Category" States. For "Special Category" States, the grant of ^ 1350 or 22.5% of the cost per consumer (whichever is lower) shall be available.
• To incentivize the States/UTs to fast-track installation of prepaid Smart Meters by December 2023, an additional incentive of 7.5% of the cost per consumer meter or
^ 450 (whichever is lower) shall be available. For "Special Category" States the additional incentive shall be 11.25% or ^ 675 per consumer meter (whichever is lower).
• For works other than smart metering, maximum financial assistance given to DISCOMs of "Other than Special Category" States will be 60% of the approved cost, while for the DISCOMs in special category states, the maximum financial assistance will be 90% of the approved cost.
Source: REC
Smart Consumer Metering Current Status as per Govt. of India
Sl |
Nodal Agency |
State |
DISCOM |
Scheme |
Total Sanctioned | Awarded | Cumulative Achievement |
1 |
PFC |
Andhra Pradesh |
APSPDCL |
RDSS |
23,02,644 | 19,76,922 | 0 |
2 |
PFC |
Andhra Pradesh |
APCPDCL |
RDSS |
20,50,962 | 13,59,912 | 0 |
3 |
PFC |
Andhra Pradesh |
APEPDCL |
RDSS |
12,55,240 | 9,82,316 | 0 |
4 |
PFC |
Uttarakhand |
UPCL |
RDSS |
15,84,205 | 0 | 0 |
5 |
PFC |
Gujarat |
DGVCL |
RDSS |
40,78,120 | 16,88,251 | 0 |
6 |
PFC |
Gujarat |
MGVCL |
RDSS |
32,99,991 | 32,99,991 | 0 |
7 |
PFC |
Gujarat |
PGVCL |
RDSS |
55,83,509 | 22,57,478 | 0 |
8 |
PFC |
Gujarat |
UGVCL |
RDSS |
35,20,251 | 35,25,480 | 0 |
9 |
PFC |
Haryana |
DHBVNL |
RDSS |
41,65,618 | 0 | 0 |
10 |
PFC |
Haryana |
UHBVNL |
RDSS |
32,40,000 | 0 | 0 |
11 |
PFC |
Himachal Pradesh |
HPSEBL |
RDSS |
28,00,945 | 0 | 0 |
12 |
PFC |
Jharkhand |
JBVNL |
RDSS |
13,41,306 | 0 | 0 |
13 |
PFC |
Kerala |
KSEBL |
RDSS |
1,32,48,923 | 0 | 0 |
14 |
PFC |
Kerala |
TCED |
RDSS |
40,438 | 0 | 0 |
15 |
PFC |
Madhya Pradesh |
MP-East |
RDSS |
51,44,451 | 9,71,306 | 0 |
16 |
PFC |
Madhya Pradesh |
MP-Central |
RDSS |
39,55,918 | 9,39,527 | 0 |
17 |
PFC |
Madhya Pradesh |
MP-West |
RDSS |
38,79,733 | 3,74,241 | 42,702 |
18 |
PFC |
Maharashtra |
MSEDCL |
RDSS |
2,24,88,866 | 0 | 0 |
19 |
PFC |
Maharashtra |
BEST |
RDSS |
10,75,881 | 10,75,890 | 0 |
20 |
PFC |
Puducherry |
PED |
RDSS |
4,03,767 | 0 | 0 |
21 |
PFC |
Punjab |
PSPCL |
RDSS |
87,84,807 | 0 | 0 |
22 |
REC |
Andaman and Nicobar |
EDANI |
RDSS |
83,573 | 0 | 0 |
23 |
REC |
Arunachal Pradesh |
Arunachal PD |
RDSS |
2,87,446 | 0 | 0 |
24 |
REC |
Assam |
APDCL |
RDSS |
63,64,798 | 49,57,239 | 3,24,829 |
25 |
REC |
Bihar |
NBPDCL |
RDSS |
10,30,000 | 10,30,000 | 6,25,389 |
26 |
REC |
Bihar |
SBPDCL |
RDSS |
13,20,000 | 13,20,000 | 8,09,359 |
27 |
REC |
Chhattisgarh |
CSPDCL |
RDSS |
59,62,115 | 44,61,743 | 0 |
28 |
REC |
Goa |
Goa PD |
RDSS |
7,41,160 | 0 | 0 |
29 |
REC |
Jammu and Kashmir |
JPDCL |
RDSS |
7,21,346 | 0 | 0 |
30 |
REC |
Jammu and Kashmir |
KPDCL |
RDSS |
6,85,699 | 0 | 0 |
31 |
REC |
Karnataka |
- |
RDSS |
0 | 0 | 0 |
32 |
REC |
Ladakh |
Ladakh PD |
RDSS |
0 | 0 | 0 |
33 |
REC |
Manipur |
MSPDCL |
RDSS |
1,54,400 | 0 | 0 |
34 |
REC |
Meghalaya |
MePDCL |
RDSS |
4,60,000 | 0 | 0 |
35 |
REC |
Mizoram |
Mizoram PD |
RDSS |
2,89,383 | 0 | 0 |
36 |
REC |
Nagaland |
Nagaland PD |
RDSS |
3,17,210 | 0 | 0 |
37 |
REC |
Rajasthan |
AVVNL |
RDSS |
54,32,231 | 0 | 0 |
38 |
REC |
Rajasthan |
JdVVNL |
RDSS |
40,80,082 | 0 | 0 |
39 |
REC |
Rajasthan |
JVVNL |
RDSS |
47,62,643 | 0 | 0 |
40 |
REC |
Sikkim |
Sikkim PD |
RDSS |
1,44,680 | 0 | 0 |
41 |
REC |
Tamil Nadu |
TANGEDCO |
RDSS |
3,00,00,000 | 0 | 0 |
42 |
REC |
Tripura |
TSECL |
RDSS |
5,47,489 | 0 | 0 |
43 |
REC |
Uttar Pradesh |
DVVNL |
RDSS |
53,54,069 | 24,49,604 | 0 |
44 |
REC |
Uttar Pradesh |
KESCO |
RDSS |
6,25,001 | 0 | 0 |
45 |
REC |
Uttar Pradesh |
MVVNL |
RDSS |
75,28,737 | 0 | 0 |
46 |
REC |
Uttar Pradesh |
PVVNL |
RDSS |
61,43,261 | 61,43,261 | 0 |
47 |
REC |
Uttar Pradesh |
PuVVNL |
RDSS |
73,27,988 | 46,88,898 | 0 |
48 |
REC |
West Bengal |
WBSEDCL |
RDSS |
2,07,17,969 | 0 | 0 |
49 |
REC |
Andaman and Nicobar |
EDANI |
IPDS |
36,800 | 36,800 | 36,800 |
50 |
REC |
Andaman and Nicobar |
EDANI |
DDUGJY |
38,400 | 38,400 | 38,400 |
51 |
Utility |
Andhra Pradesh |
APEPDCL |
Utility Owned |
2,000 | 2,000 | 2,000 |
52 |
REC |
Assam |
APDCL |
Utility Owned |
70,000 | 70,000 | 70,000 |
53 |
NSGM |
Assam |
APDCL |
IPDS (SG Pilots) |
14,519 | 14,519 | 14,519 |
54 |
REC |
Assam |
APDCL |
Utility Owned |
1,34,000 | 1,34,000 | 1,34,000 |
55 |
REC |
Assam |
APDCL |
Utility Owned |
1,34,000 | 1,34,000 | 1,34,000 |
56 |
REC |
Assam |
APDCL |
Utility Owned |
32,276 | 32,276 | 2,262 |
57 |
REC |
Bihar |
NBPDCL |
Utility Owned |
1,02,90,000 | 26,00,000 | 1,89,274 |
58 |
REC |
Bihar |
SBPDCL |
Utility Owned |
45,10,339 | 10,00,000 | 41,909 |
59 |
Utility |
Bihar |
SBPDCL |
Utility Owned |
40,500 | 40,500 | 40,500 |
60 |
Utility |
Bihar |
IPCL |
Utility Owned |
17,100 | 17,100 | 17,100 |
61 |
Utility |
Bihar |
BEDCPL |
Utility Owned |
1,000 | 1,000 | 1,000 |
62 |
NSGM |
Chandigarh |
CED |
NSGM |
29,433 | 29,433 | 24,214 |
63 |
EESL |
Delhi |
NDMC |
Utility Owned |
65,000 | 65,000 | 65,000 |
64 |
Utility |
Delhi |
TPDDL |
Utility Owned |
1,95,000 | 1,95,000 | 1,95,000 |
65 |
NSGM |
Gujarat |
UGVCL |
IPDS (SG Pilots) |
23,760 | 23,760 | 23,760 |
66 |
NSGM |
Haryana |
UHBVNL |
IPDS (SG Pilots) |
10,188 | 10,188 | 10,188 |
67 |
NSGM |
Haryana |
SGKC Lab |
IPDS (SG Pilots) |
10 | 10 | 10 |
68 |
PFC |
Haryana |
DHBVNL |
Utility Owned |
5,00,000 | 5,00,000 | 2,56,972 |
69 |
PFC |
Haryana |
UHBVNL |
Utility Owned |
5,00,000 | 5,00,000 | 4,41,390 |
70 |
NSGM |
Himachal Pradesh |
HPSEBL |
IPDS (SG Pilots) |
1,335 | 1,335 | 1,335 |
71 |
PFC |
Himachal Pradesh |
HPSEBL |
IPDS |
75,712 | 75,712 | 75,712 |
72 |
PFC |
Himachal Pradesh |
HPSEBL |
Utility Owned |
76,028 | 76,028 | 76,028 |
73 |
REC |
Jammu and Kashmir |
JPDCL |
PMDP- Phase-I |
1,00,000 | 67,650 | 66,015 |
74 |
REC |
Jammu and Kashmir |
JPDCL |
PMDP- Phase-II |
3,00,000 | 2,69,333 | 1,07,861 |
75 |
REC |
Jammu and Kashmir |
KPDCL |
PMDP- Phase-I |
1,00,000 | 59,400 | 58,651 |
76 |
REC |
Jammu and Kashmir |
KPDCL |
PMDP- Phase-II |
3,00,000 | 2,69,334 | 81,567 |
77 |
NSGM |
Karnataka |
CESC |
IPDS (SG Pilots) |
21,874 | 21,874 | 21,874 |
78 |
PFC |
Kerala |
CPT |
IPDS ST&D |
805 | 805 | 805 |
79 |
REC |
Ladakh |
Ladakh PD |
SDP |
58,930 | 58,930 | 928 |
80 |
PFC |
Madhya Pradesh |
MP-West |
IPDS |
1,24,477 | 1,24,477 | 1,24,477 |
81 |
PFC |
Madhya Pradesh |
MP-West |
Utility Owned |
2,20,986 | 2,20,986 | 1,03,302 |
82 |
PFC |
Madhya Pradesh |
MP-West |
IPDS ST&D |
1,18,836 | 1,18,836 | 1,18,836 |
83 |
REC |
Mizoram |
Mizoram PD |
Utility Owned |
656 | 656 | 656 |
84 |
Utility |
Odisha |
OPTCL |
Utility Owned |
4,000 | 4,000 | 4,000 |
85 |
Utility |
Odisha |
PPT |
Utility Owned |
500 | 500 | 500 |
86 |
NSGM |
Puducherry |
PED |
IPDS (SG Pilots) |
28,910 | 28,910 | 28,910 |
87 |
Utility |
Puducherry |
PED |
Utility Owned |
1,658 | 1,658 | 1,658 |
88 |
PFC |
Punjab |
PSPCL |
IPDS |
88,107 | 88,107 | 88,107 |
89 |
PFC |
Punjab |
PSPCL |
Utility Owned |
7,893 | 7,893 | 0 |
90 |
PFC |
Punjab |
PSPCL |
Utility Owned |
9,57,093 | 9,57,093 | 2,86,093 |
91 |
REC |
Rajasthan |
AVVNL |
IPDS |
68,673 | 68,673 | 68,673 |
92 |
REC |
Rajasthan |
AVVNL |
Utility Owned |
1,000 | 1,000 | 1,000 |
93 |
REC |
Rajasthan |
JVVNL |
IPDS |
2,40,820 | 2,40,820 | 2,40,820 |
94 |
REC |
Rajasthan |
JVVNL |
Utility Owned |
40,962 | 40,962 | 32,377 |
95 |
NSGM |
Rajasthan |
JVVNL |
NSGM |
1,49,089 | 1,49,089 | 1,37,802 |
96 |
REC |
Rajasthan |
JVVNL |
Utility Owned |
70,000 | 70,000 | 70,000 |
97 |
REC |
Rajasthan |
JdVVNL |
IPDS |
56,027 | 56,027 | 56,027 |
98 |
REC |
Tamil Nadu |
TANGEDCO |
Utility Owned |
1,40,849 | 1,40,849 | 1,26,510 |
99 |
NSGM |
Telangana |
TSSPDCL |
IPDS (SG Pilots) |
8,882 | 8,882 | 8,882 |
100 |
NSGM |
Tripura |
TSECL |
IPDS (SG Pilots) |
43,081 | 43,081 | 43,081 |
101 |
NSGM |
Uttar Pradesh |
IITK |
IPDS (SG Pilots) |
28 | 28 | 28 |
102 |
REC |
Uttar Pradesh |
MVVNL |
Utility Owned |
9,04,000 | 9,04,000 | 3,80,731 |
103 |
REC |
Uttar Pradesh |
PVVNL |
Utility Owned |
11,63,000 | 11,63,000 | 1,98,726 |
104 |
REC |
Uttar Pradesh |
DVVNL |
Utility Owned |
6,29,000 | 6,29,000 | 1,47,991 |
105 |
REC |
Uttar Pradesh |
PuVVNL |
Utility Owned |
11,47,225 | 11,47,225 | 3,21,433 |
106 |
REC |
Uttar Pradesh |
KESCO |
Utility Owned |
1,56,000 | 1,56,000 | 1,38,072 |
107 |
NSGM |
West Bengal |
WBSEDCL |
IPDS (SG Pilots) |
5,164 | 5,164 | 5,164 |
108 |
Utility |
West Bengal |
CESC |
Utility Owned |
10,000 | 10,000 | 10,000 |
109 |
REC |
West Bengal |
WBSEDCL |
Utility Owned |
4,80,790 | 0 | 0 |
Total |
22,98,73,570 | 5,62,33,362 | 67,75,209 |
Company Overview
Incorporated in 1960, Permanent Magnets has a rich experience of over 60 years in the magnets, magnetic assemblies and shunts domain. The Company is a leading solution provider of electrical components and assemblies based on certain core technologies which find application in the automobile, energy meter, renewable energy, aerospace & defence, food & beverage and many other such industries. The Company has strong expertise in 5 core product categories, wherein it designs and delivers innumerable customer-specific solutions, and these product categories include magnetic sensing, current sensing, magnetic assemblies, alloys and ZAMAK die-casting.
PMLs exceptional expertise in the fields of metallurgy, mechanical engineering, electrical engineering and electronics, enable it to offer comprehensive solutions to its clients. Due to its long-standing presence in the industry, the Company has an excellent understanding of clients quality requirements.
Apart from this the Company possesses superior capabilities in design & simulation of components & modules including customer-specific prototyping; various metals & metallurgical processes; and manufacturing technologies such as assembly processes, finishing processes, hot chamber die-casting and plastic moulding.
PML works closely with its distinguished clientele from across industries, many of whom are global leaders in their respective industries. While in some cases PML is one of the two-three suppliers for specific products, it is also the only supplier for many of its clients. PML is a preferred supplier of electrical components and assemblies to about 50% of the tier-1 automobile companies globally, in both traditional ICE vehicles and emerging technologies like EV. It is also a supplier to the top 3 electricity meter companies globally, and the Company holds a strong position in this segment with long-standing client relationships.
Internal Controls and Systems
There are established procedures for internal control on a Company-wide basis. Policies and procedures have been laid down to provide reasonable assurances that assets are safeguarded from risks of unauthorized use/disposition, and transactions are recorded and reported with proprietary accuracy and speed. These aspects are regularly reviewed during internal audits and statutory audits. In addition, the Company has also laid down adequate internal controls for financial reporting. During the year, such controls were tested, and no material weakness in their operating effectiveness was observed. The Finance and Accounts function is well-staffed with experienced and qualified personnel, and this team participates in the preparation and monitoring of budgets. The Audit Committee of the Board reviews internal Audit Reports periodically.
FY23 Performance Discussion
Total Income for the year stood at ?188.19 crore, as compared to ?133.26 crore in FY22, registering an increase of 41%. EBITDA (Excluding OI) for the year stood at ?41.27 crore in FY23, as compared to ?26.73 crore in FY22, subsequently EBITDA margin stood at 23% in FY23 as compared to 21% in FY22. Profit After Taxes for the year stood at ?29.75 crore, as compared to ?19.04 crore in FY22, registering an increase of 56% in the year.
Financial Ratios
Ratios |
FY23 | FY22 | % Change | Remarks |
Total Debt to Equity (Times) | 0.05 | 0.03 | 60% | Due to negligible increase in debt |
Current Ratio (Times) | 3.40 | 3.26 | 4% | NA |
Interest Coverage (Times) | 32.46 | 30.84 | 5% | NA |
Debtors Turnover (Times) | 4.23 | 3.79 | 12% | NA |
Inventory Turnover (Times) | 2.03 | 2.02 | 1% | NA |
Operating Profit Margin (%) | 22.58% | 20.64% | 9% | NA |
Net Profit Margin (%) | 15.81% | 14.29% | 11% | NA |
Return on Net Worth (%) | 26.81% | 23.16% | 16% | NA |
Outlook
The outlook for the upcoming financial year remains promising, supported by several key factors. These include a growing pipeline of customer projects, an increase in the size of customer projects, expanding market share in existing product categories, and the integration of newer technologies and capabilities.
Additionally, we have made significant progress in engaging with customers in new markets, such as China. Though our business hasnt seen significant scale-up in these markets yet, we hold an optimistic view of their potential.
Furthermore, we are actively pursuing forward integration and product stage scale-up in certain categories. For instance, we are focusing on scaling up from magnets to assemblies in motors, which are utilized in Automobiles (Non-Current-Sensing Category). These strategic initiatives are expected to drive growth and solidify our position with customers in the long term.
Industrial Relations and Human Resource Management
The Company believes that the motivation of employees is the key to its success. It is committed to equipping them with the required training and skills, enabling them to evolve with technological advancements and achieve financial goals. The Companys HR department was consistently in touch with the employees to guide and solve their problems. The Companys permanent employee strength stood at 103 as of March 31,2023.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Companys objectives, estimates, expectations, or projections may constitute "forwardlooking statements" within applicable laws and regulations. However, actual results may differ materially from those either expressed or implied in the statements. Important factors that would influence the Companys operations include raw materials prices, product and application industrys performance, tax laws, interest rates, power cost, economic developments, and other factors within the country and the global economics domain.
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www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.