A) Economic Scenario:
A.1. World Scenario:
The survey conducted by IMF (International Monetary Fund) in April 2023 forecasts that
the real GDP (Gross Domestic Product) on annual percentage change, in calendar year 2023
is 2.8%, down from 3.4% in 2022. Advanced economies suffered most, while emerging markets
and developing economies showed the signs of recovery in 2023. As per ADB (Asian
Development Bank) reports, faster economic growth in Asia in 2023 will be driven by strong
demand in India and signs of recovery by China from pandemic.
A.2 Indian Scenario:
Indian economy demonstrated its strong resilience against internal shocks due to COVID
19 pandemic and external shocks due to Russia – Ukraine war and geopolitical tensions
prevailing in indo pacific region. Indian economy is the fastest growing economy among the
major developing economies. IMF projects Indias FY 23-24 growth at 5.9%, while world bank
has estimated Indias GDP growth rate for the current FY 23-24 at 6.3%. The data released
by National Statistical Office of India as on 6th January, 2023 shows the
estimated growth in real GDP during FY 22-23 at 7.0%.
A3. Industry Structure:
M/s. Ram Ratna Wires Limited (herein after referred as "The Company"/
"RRWL"), is the second largest manufacturer of winding wires and related
insulated products in terms of quantity in South Asia, providing total winding solutions,
to a variety of OEMs, (original equipment manufacturers) covering a wide spectrum of
industries which include Automotive, defense & aerospace, electrical, electronic, home
appliances, health care, lighting, telecommunication and allied sectors, like
infrastructure. Your company is the only manufacturer of enamelled copper wires in India,
that offers the widest range from the thinnest wire of 18 micron (0.018mm) to 4.876 mm
with intermediate sizes. Broadly, the companys major products may be classified as
Enamelled copper wire (ECW), Enamelled copper strips (ECS), Paper insulated Copper strips
(PCS), Enamelled aluminium wire (EAW), Submersible Winding wires (SWW).
Total production of all types of wires, strips and other products during FY 22-23 stood
at 30,748 Tonnes, 20% more than that of FY 21-22. The Capacity utilization during FY 22-23
has also gone up to 79%, compared to 70% during FY 21-22.
Roughly 70% of total production covers enamelled copper wire, while the remaining 30%
is attributed to other products such as enamelled copper strips, paper covered copper
wires and strips, submersible winding wires in different combinations of insulation,
litzwires, bunched and braided wires, self bonding wires, nylon coated wires, fiberglass
insulated wires & strips, aluminium winding wires &strips.
B) Development & Modernization:
Continuous improvement in process, product quality & services, by a highly
interactive, customer centric and strong R&D team is the asset and the strength of
RRWL. Over the years, your company has developed a number of innovative products like
corona resistant wires. During FY 22-23 the R&D team prioritized up-gradation,
standardization and maintaining consistency in quality and strict adherence to the
specifications of those products. Moving with the times, your company has stepped into
automation to make the production plants as per Industry 4.0 standards. This involves step
wise projects for digitization of the existing manual control of machines by input/output,
time data analysis and desktop control panels for the executive and management team.
C) Outlook:
C.1.1. Demand for winding wires & strips in India:
Indian Electrical and electronic industry witnessed a record double digit growth of 13%
for FY 22-23, as stated in IEEMA journal. Record production in segments like Transformers,
Rotating Machines, Meters etc. demonstrate strong demand for winding wires and strips.
FY 22-23 has been a landmark year for exports of electrical equipment industry with
export revenue more than 3 times that of 2013-2014. The target of achieving Export worth
USD 25 billion is in the agenda of both Government of India and IEEMA. On the domestic
front, the demand for electrical equipments especially household equipments, Air
conditioners, Refrigerators also on the rise, because of the purchasing power of growing
Indian middleclass. According to United nations latest report, India has witnessed a
remarkable achievement of 415 million people coming out of poverty over a period of 15
years from 2005-06 to 2019-21. As per Niti Aayog data, over a span of 5 years from
2016-2021, Indias poverty has decreased by 10%.
All the above factors will spur the demand for household equipments and appliances
which in turn will boost the demand for winding wires and strips.
C1.2 RR Shramik brand:
RR Shramik brand continues to serve its esteemed customers with innovative products
and customer centric winding wires & strips. For Example, corona resistant wire
developed in-house, gained immense popularity in the market. The sale of corona resistant
wire went up to 35.08% in FY 22-23, over that of previous financial year. Likewise,
Bondable wire sale shot up to 383%. Another value added product, Litz/braided/bunched
wires, sold more than 44.68% over to that of FY 21-22. MCB Coil sale made a steep rise up
to 1613% over that of previous financial year.
C1:3 Quality First:
Your company continue to fulfill the requirements and implementation of the scope
covered under the quality management systems for the following prestigious international
quality management certificates.
ISO 9001:2015: International Standard Organization – Quality Management system
ISO 14001:2015: International Standard Organization – Environment Management
system
ISO 45001:2018: International Standard organization – Occupational health and
safety management systems
IATF 16949:2016: International Automotive Task force – Quality
Management System which covers quality management, human resource, marketing, strategic
planning policy making and purchasing
RRWL have scored excellent ratings in assessment audits by certain MNCs (Multi-National
Companies). Such results are posted and displayed on their global websites through which
global purchase enquires are received. Your Company has been able to add many more reputed
new customers to the existing lists.
All the above, domestic and international factors spur the demand for your Companys
products and therefore, future outlook for RR Shramik brand products is very good.
D) Opportunities and threats: D.1.Opportunities:
India is the fastest growing emerging major economy. Our Nation is marching towards a
USD 5 trillion dollar economy, which is projected to materialize in the near future.
Performance of Indian electrical equipment Industry in FY 22-23 is also an indication. The
growth of the electrical equipment industry for which winding wire is an essential input
is directly linked to the growth in installed capacity of power generation and per capita
consumption of electricity.
The installed capacity of Electricity generation as of May, 2023 stands at around 417
Giga Watts. The Government of India has projected the installed capacity to 817 Giga
watts, by 2030. The per capita consumption of electricity which has been growing at a very
fast rate, since 2013, comes to 1297 KWH as on 2022. Still this is less than half of world
average. Therefore, there is huge scope of electricity consumption and hence the growth of
electrical & electronic equipment which will eventually boost the demand for winding
wires and strips.
D.2.Threats:
Global economy is in turmoil, due to energy crisis, (as in Europe) high inflation,
elevated prices of essential raw materials, supply chain disruptions owing to the
continued Russia-Ukraine war, geopolitical tensions prevailing in Indo-pacific region and
post COVID 19 pandemic effects. It is unclear and uncertain as of now, when the situation
is going to be normalized or go worse. The negative impact of such a worsening situation
is detrimental to industrial activity due to supply chain disruptions in raw materials,
semi-finished goods, critical components and finished goods. In todays globalized world
no nation is totally immune from such an international crisis.
Strengthening of major international currencies against Indian rupee and the consequent
rise in cost of imported raw material and consumables, rising cost of production, due to
wage increase and price increase of inputs, inflation, fluctuating copper prices in the
international market, competition in prices from the handful of other manufacturers
are major threats for the profitability of your Company.
E) Performance Review:
During the financial year 2022-23, revenue from operations including other income on
standalone basis is 2,33,588.82 Lakhs as against 2,01,951.27 Lakhs in the previous
year. Profit After tax for the current year is 4,290.69 Lakhs as against 4,867.71
Lakhs in the previous year.
On Consolidated Basis revenue from operations including other income is 2,65,651.40
Lakhs as against 2,29,523.77 Lakhs in the previous year. Profit After tax for the
current year is 4,699.96 Lakhs as against 5,417.65 Lakhs in the previous year.
Key Financial Ratios:
|
Standalone |
| Ratios |
FY 2022-23 |
FY 2021-22 |
| Debtors Turnover Ratio |
7.84 |
7.34 |
| Inventory Turnover Ratio |
18.02 |
17.74 |
| Interest Coverage Ratio |
2.29 |
2.18 |
| Current Ratio |
1.50 |
1.60 |
| Debt Equity Ratio |
0.63 |
0.77 |
| Operating Profit Margin% |
3.56% |
4.24% |
| Net Profit Margin% |
1.84% |
2.42% |
| Return on Net Worth (RONW) |
14.11% |
18.37% |
Explanation for variance in ratios by more than 25%:
None of the ratios are having variance by more than 25%, hence no explanation for same
has been given.
F) Internal Control Systems and their Adequacy:
The Company has in place adequate internal financial controls in commensurate with the
size, nature of its business and complexity of its operations and it is monitored
periodically by the Management of the Company and improvements are made in the same on
continuous basis and as per amendments in the laws and regulations. These internal
controls are also evaluated and monitored by the Internal and Statutory Auditors of the
Company and their reports are placed before the Audit Committee together with the status
of the management actions or replies for their review and corrective actions and
suggestions if any required.
G) Human Resources Development: Training & Industrial Relations:
The Company views human resource as its biggest asset and in line with our overall
strategy to a future ready organization, the Company regularly conducts various training
programs to groom its employees at all levels with new skills and empowering them to
realize their full potential to ensure competence. The Company provides infrastructure for
safe and healthy working conditions for all the employees. The Company is committed to
maintain healthy, cordial and harmonious industrial relations at all levels. The Company
employed 842 number of permanent employees on its Roll as on 31st March, 2023.
References:
1. IEEMA Journal – various editions
2. World Economic Outlook Report
3. Economic Survey – 2022-23
For and on behalf of the Board of Directors of
Ram Ratna Wires Limited
|
Tribhuvanprasad Rameshwarlal Kabra |
| Place: Mumbai |
Chairman |
| Date: 26th May, 2023 |
DIN: 00091375 |
+91-9892691696
