GLOBAL ECONOMIC OVERVIEW
As per the latest estimates by the International Monetary Fund, global growth slowed
down and is estimated to grow by 3.4% in CY23 compared to 6.2% in CY22. "As per the
Global Economic Outlook, Global Growth is to fall from 3.4% in F-22 to 2.8% in F-23 before
settling at 3.0% in 2024". With the exception of the global financial crisis and the
peak of the COVID-19 crisis, it is the weakest growth estimate since 2001. Global
inflation is further expected to rise from 4.7% in 2021 to 8.8% in 2022, before softening
to 6.5% in 2023 and 4.1% in 2024. Dwindling private sector savings will test the emerging
markets ability to withstand continued tightening in global financial conditions and
weaker global growth. Geopolitical stresses remain unresolved and represent two-sided
risks for emerging markets in 2023.
Flexible exchange rates are insufficient to absorb external shocks and policymakers
will need to implement foreign exchange interventions or capital flow management measures
to emerge from the present scenario.
Indian Economy:
The Indian economy demonstrated resilient growth in FY 2022-23, manifesting strong
indications of macroeconomic stability. The country has recovered from a series of shocks
such as the pandemic induced disruption in economic activity, and the sudden rise in
commodity prices fuelling inflation owing to the prolonged Russia- Ukraine conflict.
According to the first advance estimates by National Statistical Office (NSO), the Indian
economy is estimated to have recorded a growth of 7% in FY 202223, thus reiterating its
position as one of the fastest-growing major economies.4 According to a recent valuation
in terms of size by the International Monetary Fund (IMF), the Indian economy has
overtaken the United Kingdoms economy and become the worlds fifth-largest economy. This
is the outcome of prudent fiscal and monetary policies of the Government of India and the
RBI, proactive vaccination coverage and the sustained capital expenditure of the
government.
A revival in private investment after the pandemic and bank credit growth are likely to
restore momentum of the economy against the background of global recession. Inflation
continues to be a major challenge for growth. According to the RBI, headline inflation is
estimated to be at 6.5% for FY 2022-23. The RBI has estimated the inflation for the
October- December 2022 quarter to be 6.6% and for the January-March 2023 quarter at 5.9%.
It is projected to further decrease to 5% in the April-June 2023 quarter. However, it is
not high enough to deter private consumption and also not so low as to weaken the
inducement to invest...
Outlook
Indias recovery from the pandemic was relatively quick compared to other developing
economies, and growth in the coming year will be supported by robust domestic demand and a
pickup in capital investment. Even as Indias outlook remains bright, global economic
prospects for the near term have been weighed down by various challenges, which are
expected to impart a few spill-over effects for the Indian economy.
Against this backdrop, the Economic Survey projects a baseline GDP growth of 6.5% in
real terms in FY 2023-24. The projection is broadly in line with estimates provided by
multilateral agencies such as the World Bank, the IMF, and the ADB and by RBI.
[Source: Economic Survey 2022-23].
SWOT Analysis
Introduction:
Solar energy is one of the best options as it is a clean renewable energy source, and
found abundantly in most places. In 90 minutes, the earth receives an amount of energy
that is sufficient to meet the energy demand of the planet for one year from the sun.
Although the solar energy is abundant to this extent, the energy taped from this source is
a tiny fraction of the worlds current energy mix. However, this is changing rapidly and
is being driven by global action to improve energy access and supply security, and to
mitigate climate change.
Countries and companies all over the world are currently investing huge amount of money
on solar energy. As a consequence, the technologies are advancing and cost of operating
the solar energy is reducing from time to time.
A. Strength
* Limitless: Solar energy originates from the sun, and it is one of the main
sources of unlimited free energy available on Earth. Theoretically solar energy has the
capacity to fulfil the energy demand of the world. Despite this huge potential and
increase in awareness, the contribution of solar energy to the global energy supply is
still insignificant. Theoretically the amount of solar energy that touches the earth is
4200 times the energy that human population would consume in the year 2035. In few hours
the earth can get the amount of solar energy that covers the annual energy consumption.
Hence, developing an efficient and effective capacity of collecting solar energy could
potentially solve the energy demand of the world without requiring additional sources of
energies. The amount of solar energy that can be collected depends on the location. For
example, India receives 4 to 7 KW/hr of solar radiation per square meter per day for more
than 250 days per year.
* Environmentally Friendly: The energy from the sun is collected and stored to
generate electricity. This method is considered as a renewable alternative to
non-renewable technologies. Thus, the usage of solar energy greatly reduces the negative
impact of carbon emissions. In California USA, an average of 696,544 metric tons of carbon
emission was reduced through the installation of solar system onto 113,533households. In
addition, solar energy does not release other harmful gases that could harm the
environment. The solar panels used on household can be recycled. It can then be concluded
that solar energy is a nonpolluting, reliable and clean source of energy.
* Ease of usage/harvest: Solar energy is collected mostly using solar panels that
generate electricity by using photovoltaic technology. Installation of solar energy system
can be done anywhere. For instance, solar panels are now easily placed on the rooftops of
houses and commercial buildings. However, one could say that it would be impossible to
install solar system on their homes especially if they are not the sole owner or due to
lack of space or shade requirement by others. In countries like America with the
introduction of shared solar energy there is no more problem with space unavailability.
Homeowners can obtain electricity from the community solar garden without having solar
panels on rooftop.
* Less overall cost: At first the investment of solar system seems expensive. Once
solar system is installed the running cost is very low. Hence, in the long-run the cost
benefit of using solar energy would be better than other sources of energy. Solar panels
have low maintenance cost and can serve for 10 to 15 years with minor service. In
addition, solar power benefits us in various ways such as tax incentives and added
property values. Particularly when solar energy is used for specific purpose such as in
draying of different products, the benefit obtained will be significant. In certain
countries like USA, Germany, Denmark, UK and France drying of food products consumes 7-15%
of industrial energy which can be done simply by solar energy [9]. Thus, for such
processes solar energy is being used as an alternative source to reduce the high cost
associated with drying.
* Versatile: Solar power is utilized either directly or indirectly in numerous
applications that are not limited to industry purposes but also applicable on day-to-day
usage such as, drying of agricultural and industrial products, solar powered refrigerator,
water heating, solar cooking, etc. Using solar radiation for drying or removal of excess
moisture from a product is a widely used method to meet the specification required for
industrial processes. For instance, in the gasification process of biomass the moisture
content of the feedstock should not exceed 20%, and this can be achieved by removing the
moisture using solar driers. Solar energy is also widely used in cooking particularly in
areas when the solar radiation intensity is high and no electricity. In solar cooking,
radiation from the sun is concentrated at one point with the help of reflectors. Various
type of solar cookers has already been invented such as box cooker, parabolic cooker,
panel cooker and so on.
Government Support: Solar Industries get immense support from the government of
India because the industry deals in the manufacturing of products for Indias defence
sector and to keep the sector top of the line, the government has to finance such
industries all the time.
B. Weakness
* Solar Power is Available Only in Day Time: As solar radiation is available only
in day time, photovoltaic panels and other collectors are able to convert solar energy
into other forms of energy only when there is sunlight. For this reason, solar power needs
to have energy storage system to get uninterrupted power supply. The solar system is also
installed with other power supplement to replace when the available solar radiation is not
enough or the energy storage is not enough to supply for the rest of the day when solar
radiation is not available. The backup system is also an additional cost that makes solar
system more expensive.
* Solar Panels are inefficient: The conversion efficiency of solar panels is very
low compared to other energy conversion system. The achievable conversation efficiency of
the solar energy into usable energy by solar panels are not exceeding 20% in general.
Because of the inefficiency of the panels, a large space is required to collect solar
energy which is just enough for an average household.
* The Space Required for PV: Many photovoltaic cells are needed to absorb enough
energy for larger applications. The efficiency of photovoltaic panel drops dramatically
due to overheating of the panel and as a result large quantity of solar panel is required.
Since the space required for the solar collectors are large, identifying a space where it
is not used for other purposes is frequently a challenging task.
* High Initial Cost: Although installation of solar system brings immense benefits,
the initial investment cost is expensive. Quantifying the total cost is also difficult
without the assistance of the manufacturing company. However, as most of the governments
are concerned with the global warming that is caused by burning of fossil fuels, a subsidy
and tax exemptions are provided for users of solar energy which helps to reduce the burden
of overall installation cost of solar energy.
C. Opportunities
* Create New Business Opportunities: Every new innovation opens business
opportunities. Currently, Tesla and Panasonic are orchestrating a huge solar panel
manufacturing plant in Buffalo, New York. The power wall produced by Tesla has increased
dramatically in the recent years. The demand of solar panels by real states are growing in
recent years. Landowners have got opportunities to rent their unused land for new solar
farms and get income. In countries like US, Germany, Italy, China, India, Japan and the
UK, the market for solar products are growing very fast. Worldwide the demand for
utilization of solar energy increases by more than9% every year.
* Availability of Subsidy and Support: In most countries governmental and
non-governmental organizations have subsidy and income tax exemptions schemes. The Indian
Government is giving subsidy for installation of solar rooftop system for household
sector. The various state government in India giving subsidy for installation of solar in
the Household sector.
* Cost Reduction: Solar energy technologies are developing quickly and the
computation in the market on the technologies are increasing. The competition in the
technology leads to an improved efficiency and cost reduction. The Price of Silicon cell
is globally going to reduce day by day. Hence, overall cost of solar technology is getting
down which is good thing for us.
* Government Contracts: Solar Industries should try seeking more government
contracts as they deal in products and services that are mostly demanded by the government
for the defence sector and industrial development. Hiring contracts will open new revenue
streams for Solar Industries.
D. Threats
* Health risks: A new investigation by Environmental Progress (EP) reported that
lethal waste from the used solar panels presents a worldwide environmental danger. The
disposal of solar panels, which contain unsafe components such as lead, chromium, and
cadmium are running over the world, but effort to minimize the adverse effect is very
minimal. According to EP research, developing nations like India and China frequently burn
the e-waste to reclaim the copper wires which is profitable for resale. Since this
procedure requires burning off plastic, the resulting smoke contains poison that may cause
cancer and teratogenic (birth deformity)when its being inhaled. It is approximated that
per quadrillion joules of energy produced, 11 and 21 deaths have been identified in
conjunction with the solar energy health threats.
* High carbon footprint: A carbon footprint is characterized as the total amount of
greenhouse gases produced to either directly or indirectly in the process of realization
of a product. It is usually specified in equal tons of carbon dioxide (CO2). The fact is
that even solar power plants have an environmental footprint on a lifecycle basis. The
main components of solar PV panels are made from crystalline silicon. Manufacturing these
components is an energy-intensive process that represents ahigh percentage of the total
energy used to make solar panels. The exact carbon footprint of any solar panel relies
upon numerous variables, including the materials source, the transported distance, and the
energy used by the plants.
- Changes in the Prices of Raw Materials & End Products: The products in which
Solar Industries deal necessitates the use of fuel, oxidizer nitroglycerin and black
powder. All of these resources are limited, and obtaining them is tough. Because it is
often difficult to mine in particular places, the prices of raw resources continue to
rise, and even the prices of final products fluctuate; this is a threat to Solar
Industries.
SWOT ANALYSIS OF THE COMPANY OUTLOOK
The Renewable energy industry is well-established, viewing bright future in this
sector. India is very ambitious in its targets for promoting renewable energy. In India,
renewable energy has started playing an increasingly important role in the augmentation of
grid power, providing energy access, reducing the consumption of fossil fuels and helping
India pursue its low carbon development path. India submitted its Intended Nationally
Determined Contribution (INDC) to the UNFCCC, outlining the countrys post-2020 climate
actions. Indias INDC builds on its goal of installing 175 gigawatts (GW) of renewable
power capacity by 2022 by setting a new target to increase the countrys share of
nonfossil-based installed electric capacity to 40 percent by 2030.
The launch of the International Solar Alliance (ISA) was announced by Mr. Narendra
Modi, the Honble Prime Minister of India and Mr. Francois Hollande, former Honble
President of France on 30th November 2015, at the 21stsession of United Nations
Climate Change Conference of the Parties (COP- 21) in Paris, France. Former UN
Secretary-General Ban Ki-moon attended the launch, alongside the Heads of about 120
nations who affirmed their participation in the Alliance to dedicate efforts for promotion
of solar energy.
SCHEMES OF MINISTRY OF NEW AND RENEWABLE ENERGY (MNRE)
1) Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyaan (PM KUSUM)
PM-KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan) Scheme is aimed
at ensuring energy security for farmers in India, along with honouring Indias commitment
to increase the share of installed capacity of electric power from non-fossil-fuel sources
to 40% by 2030 as part of Intended Nationally Determined Contributions (INDCs).
The Scheme consists of three components:
Component A: 10,000 MW of Decentralized Ground Mounted Grid Connected Renewable
Power Plants of individual plant size up to 2 MW will be setup by individual farmers/
group of farmers/ cooperatives/ panchayats/ Farmer Producer Organisations (FPO)/Water User
associations (WUA) on barren/fallow land. Discom would be eligible to get PBI @ Rs. 0.40
per unit purchased or Rs.6.6 lakhs per MW of Capacity installed, whichever is less, for a
period of five years from the Commercial Operations date.
Component B: Installation of 20 lakh standalone Solar Powered Agriculture Pumps of
individual pump capacity up to 7.5 HP for replacement of existing diesel Agriculture pumps
/ irrigation systems in off- grid areas, where grid supply is not available. The State
Government will give atleast a Subsidy of 30% and Remaining at most 40% will be Provided
by the farmer.
Component C: Solarisation of 15 Lakh Grid-connected Agriculture Pumps. Under this
Component, individual farmers having grid connected agriculture pump will be supported to
solarise pumps. Solar PV Capacity up to two times of pump capacity in KW is allowed under
the Scheme.
2) Atm a Nirbhar Bharat- Production Linked Incentive Scheme (PLI)
Accordingly, PLI schemes to create manufacturing global champions for an Atma Nirbhar
Bharat have been announced for 13 sectors including manufacturing of High Efficiency
Solar PV Modules. The government has committed nearly Rs. 1.97 lakh crores, over 5 years
starting FY 2021-22 including Rs. 4500 crore for High Efficiency Solar PV Modules which
will be will be implemented by Ministry of New & Renewable Energy (MNRE). It will help
bring scale and size in Solar PV manufacturing, create and nurture global champions and
provide jobs to youth. The PLI schemes will incentivize new Gigawatt (GW) scale solar PV
manufacturing facilities in India. The EFC meeting for formulating a scheme in this regard
has already been held. It will now be taken to the Cabinet for final approval. The scheme
will reward efficiency of solar modules as well as local value addition.
Solar capacity addition presently depends largely upon imported solar PV cells and
modules as the domestic manufacturing industry has limited annual capacity of around 2,500
MW for solar PV cells and operational annual capacity of 9,000-10,000 MW for solar PV
modules.
Under the PLI Scheme 10,000 MW capacity of integrated solar PV manufacturing plants
(from manufacturing of wafer-ingot to high efficiency modules) will be set up by Q4 of
2022-23 with the direct investment for around Rs. 14,000 crore. Due to inbuilt incentive
for higher efficiency module and local value addition, it is expected that the successful
manufacturers will invest in R&D for achieving more efficiency and source their input
material locally for more PLI benefits. The scheme will additionally create further demand
of Rs 17,500 crore over a period of 5 years for locally produced balance of materials like
EVA, Solar glass, Backsheet, Junction box etc, which will help in the development and
augmentation of entire ecosystem associated with Solar PV manufacturing.
3) Development of Solar Parks and Ultra Mega Solar Power projects
Solar power projects can be set up anywhere in the country, however the scattering of
solar power projects leads to higher project cost per MW and higher transmission losses.
Individual projects of smaller capacity incur significant expenses in site development,
drawing separate transmission lines to nearest substation, procuring water and in creation
of other necessary infrastructure. It also takes a long time for project developers to
acquire land, get change of land use and various permissions, etc. which delays the
project. To overcome these challenges, the scheme for "Development of Solar Parks and
Ultra-Mega Solar Power Projects" was rolled out in December, 2014 with an objective
to facilitate the solar project developers to set up projects in a plug and play model.
4) Har Ghar Jal- Jal Jeevan Mission
(Functional Household Tap Connection (FHTC) to every household by 2024)
In his address to the nation on Independence Day-2019, Honble Prime Minister of India
announced Jal Jeevan Mission (JJM) to be implemented in partnership with States, to
provide functional household tap connection to every household by 2024. Prime Minister
has given a call to make water everyones business - a Jan Andolan.
On 15th August, 2019, piped water supply covered about 17% of rural
households, when the Prime Minister had announced potable tap water supply to every
household by 2024 under Jal Jeevan
Mission. The mission emerged from a realization that reliable access to potable water
is the cornerstone of sustainable rural development. It has been 22 months since the
announcement of the mission, and tap water supply has increased from 3.23 Crore (17%) to
7.63 Crore (39.7%), Covid-19 pandemic limitations notwithstanding. In spite of this good
progress made so far, still about 11.56 Crore rural households to be provided with tap
water supply in next 3 years, a gigantic task by any measure.
In the first quarter of 2021-22, about 28 lakh households have been provided with tap
water connections. At present, 7,82,41,464 lakh households provided with tap connections;
Now daily 1 lakh families are being given tap connections.
Out of 6.04 lakh villages in the country, as of now, more than 95 thousand villages
(16%) have already achieved 100% tap water supply to rural households. In another 1.25
lakh villages, water supply works are at different stages of completion. Similarly, out of
19.20 Crore rural households, now more than 7.63 Crore households have tap water supply.
In these 22 months, despite CoVid -19, the coverage has increased from 17% to 39.78% by
providing tap water connections to 4.39 Crore households.
5) Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects:
The Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects was
rolled out on 1212-2014 with aggregate capacity 20,000 MW. Further, the capacity of the
Solar Park Scheme was enhanced from 20,000 MW to 40,000 MW on 21-03-2017 to set up at
least 50 Solar Parks by 2021-22.
Solar Park is a large chunk of land developed with all necessary infrastructure and
clearances for setting up of Solar projects. The capacity of the Solar Parks is generally
500 MW and above. However, smaller parks (up to 20 MW) are also considered in States or
UTs where there is shortage of nonagricultural land. Approximately 4 to 5 acres per MW of
land is required for setting up Solar Parks. The total Central Grants approved under the
Scheme is Rs. 8,100 crore.
Under the scheme, the Ministry provides Central Financial Assistance (CFA) of up to _
25 lakh per solar park for preparation of Detailed Project Report (DPR). Beside this, CFA
of up to _ 20.00 lakh per MW (12 Lakh/MW for development of internal infrastructure of
solar park and _ 8 Lakh/MW for development of external power evacuation infrastructure of
solar park) or 30% of the project cost, including Grid-connectivity cost, whichever is
lower, is also provided on achieving the milestones prescribed in the scheme. The approved
grant is released by Solar Energy Corporation of India Ltd. (SECI) as per milestones.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The Companys financial performance for the year ended March 31, 2023 is summarized
below:
R in Lakhs)
|
STANDALONE |
| PARTICULARS |
YEAR ENDED 31.03.2023 |
YEAR ENDED 31.03.2022 |
| I. Net Sales/Income from Operations |
2357.71 |
718.68 |
| II. Other Income |
44.60 |
30.44 |
| III. Total Income (I+II) |
2402.31 |
749.12 |
| IV. Earnings Before Interest, Taxes, Depreciation and Amortization Expense |
42.85 |
(691.18) |
| V. Finance Cost |
3.99 |
6.27 |
| VI. Depreciation and Amortization Expense |
32.44 |
40.08 |
| VII. Profit Before Tax (IV-V-VI) |
6.42 |
(737.53) |
| VIII. Tax Expense: |
|
|
| i Current Tax Expense |
2.23 |
0.00 |
| ii MAT Credit |
0 |
0.00 |
| iii MAT Credit Relating to prior years |
0 |
0.00 |
| ivTax Expense Relating to prior years |
0 |
0.00 |
| v Deferred Tax (Asset)/Liabilities |
(1.20) |
(0.09) |
| IX. Profit After Tax (VII-VIII) |
5.39 |
(737.44) |
DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE
IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED
EXPLANATIONS THEREFOR:
| Ratios |
2022-23 |
2021-22 |
Change in % |
Remarks |
| Debtors Turnover Ratio |
2.49 |
0.93 |
167% |
Debtors Turnover Ratio has increased due to the increase in the Revenue from Operation
as well as improvement in collection period |
| Inventory Turnover |
6.31 |
2.23 |
184% |
Inventory Turnover Ratio has increased due to increase in revenue from operations |
| Interest Coverage Ratio (EBIT/Interest) |
13.22 |
-143.68 |
-109% |
Interest Coverage Ratio has turned positive as per the profits earned in the current
year |
| Current Asset Ratio |
2.26 |
2.36 |
-4% |
- |
| Debt Equity Ratio |
0.06 |
0.12 |
-50% |
Decrease in the Debt Equity Ratio is due to the repayment of short-term borrowing to
related in current year |
| Operating Profit Margin (%) |
0.02 |
-104.65 |
-100% |
Operating Profit Margin has turned positive as per the profits earned in the current
year |
| Net Profit Margin (%) |
0.23 |
-102.61 |
-100% |
Net Profit Ratio has turned positive due to improvement in gross margin as well as
increase in revenue from operations |
| Return on Net Worth |
0.18% |
-21.62% |
-101% |
Return on Net Worth has turned positive as per the profits earned in the current year |
CAUTIONARY STATEMENT
Statement in this report describing the Companys objectives projections estimates and
expectation may constitute "forward looking statement" within the meaning of
applicable laws and regulations. Forward looking statements are based on certain
assumption and expectations of future events. These Statements are subject to certain risk
and uncertainties. The Company cannot guarantee that these assumption and expectations are
accurate or will be realized. The actual results may different from those expressed or
implied since the Companys operations are affected by many external and internal factors
which are beyond the control of the management. Hence the Company assumes no
responsibility in respect of forward-looking statements that may be amended or modified in
future on the basis of subsequent developments information or events.
|
For and on behalf of the Board of Directors |
|
Sd/- |
| Place: Ahmedabad |
Piyushkumar Babubhai Thumar Chairman & Managing Director |
| Date: September 05, 2023 |
(DIN:02785269) |
+91-9892691696
