Economic overview Global economy
During the first half of financial year 2022-23, the global economy encountered various
challenges, including fluctuating prices of essential goods and resources, elevated
inflation, and disruptions in supply chains resulting from the Russia-Ukraine conflict.
However, the economy demonstrated resilience in the second half as it began to recover
from the impacts of the pandemic and geopolitical tensions. Central banks implemented
synchronized rate hikes and stricter monetary policies to effectively address these
challenges, combat inflation and stabilize the markets.
RRIL Limited is concentrated on its two-business horizon namely Textile Business and
Real Estate Redevelopment activities in the state of Maharashtra and Gujarat. The
visionary management policies and enthusiastic professionals executives engaged in the
company are dedicated to delivering the demands on time with the entire satisfaction of
customer.
FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
The Company has delivered strong performance throughout Financial Year 2022-23,
achieving consolidated sales of Rs.154.53 crore. This impressive success can be attributed
to the sales momentum gained from both segments. With industry reforms and sustained
homebuyer demand, supported by an optimum repo rate, the company holds a highly optimistic
outlook for its growth strategy and the future of the real estate sector.
Additionally, the Company achieved a remarkable growth in consolidated PAT, reaching
Rs. 13.76 crores.
COMPARISON OF FINANCIAL PERFORMANCE:
Rupees in lakhs
| Particulars |
FY 2022-23 |
FY 2021-22 |
|
Standalone |
Consolidated |
Consolidated Growth (%) |
Standalone |
Consolidated |
| Income from Operation |
4153.41 |
15453.25 |
85.82 |
1433.98 |
8316.44 |
| Earnings before interest, tax, depreciation and amortization (EBITDA) |
1286.61 |
2158.26 |
116.71 |
493.66 |
995.90 |
| Profit Before Tax (PBT) |
1277.84 |
1883.52 |
162.91 |
431.45 |
716.41 |
| Profit after tax attributable to shareholders of the company |
935.58 |
1375.60 |
224.72 |
223.92 |
423.63 |
| Earnings per share (Rs.) |
0.77 |
1.13 |
222.86 |
0.18 |
0.35 |
Analysis of revenue growth
The overall financial performance on consolidated basis is satisfactory on business
performance.
BUSINESS SEGMENT: i. TEXTILE BUSINESS
Industry Structure and Development:
As per the International Textile Manufacturers Federation (ITMF), the Textile sector
has seen weakening demand since June 2022 due to persistent global inflation and lingering
possibilities of a recession. Inflation has affected consumers and manufacturers alike
with manufacturers and suppliers having to pay much more along all stages of their supply
chains, from the cost of freight to wage increases for their workers. This has put textile
manufacturers in a difficult situation. Despite the slowdown in the sector globally, the
Indian textile and apparel industry is expected to grow at 10% CAGR from 2019-20 to reach
US$ 190 billion by 2025-26. The overall Indian textiles market is expected to be worth
more than US$ 209 billion by 2029. In FY23, exports of readymade garments (RMG) cotton
including accessories stood at US$ 7.68 billion till January 2023. It is expected to
surpass US$ 30 billion by 2027, with an estimated 4.6-4.9% share globally. This has been
made possible due to a structurally strong Indian economy fuelled by an ever-increasing
domestic demand and some critical policy initiatives taken by the Government of India.
Textile industry plays the most important role in earning of foreign exchange and
provides gainful employment to millions of people. The emerging tendency to spend more on
life style products and the spread of organized retailing and e-retailing to smaller towns
and even rural areas, has increased the demand for textile products in the domestic
market. The industry is expected to grow substantially in the upcoming years and also in
the long run.
OPPORTUNITIES AND THREATS: Opportunities:
• Favorable government initiatives such as the National Technical Textiles Mission
(NTTM), 100% FDI in the sector, SAMARTH-Scheme for Capacity Building in the Textile
Sector, etc. for the development of the textile industry.
• Extension of the scheme for Rebate of State and Central Taxes and Levies
(RoSCTL) till March 31, 2024, for the export of apparel, garments and made-ups with the
same rates would benefit textile companies.
• The growth of the technical textile market will create lucrative opportunities.
• The rapid growth of the retail sector and E-commerce will boost the growth of
the textile and apparel industry.
• Rising disposable income will stimulate domestic demand.
• The growing popularity of ‘fast fashion products will contribute to the
growth of the textile and apparel industry.
Threats:
• Being a labour-intensive sector, the shortage of skilled workforce may impact
the operations and there will be a struggle to complete orders.
• Intense competition in the global market, especially from the textile and
garment industries in Bangladesh and China.
• Subdued demand for textile and apparel exports as consumer confidence is low in
the key markets.
• Compliance issues with the environmental norms and regulations.
a. Outlook
Textile business performance was satisfactory considering the near-term uncertainty for
the financial year 2022-2023, the Company is taking all efforts to improve sales to get
more orders at competitive rates.
b. Challenges
Textile industry is always subject to facing crisis in a cyclical way and increased
competition due to surplus capacity in the country has resulted in pressure on margins due
to price under cutting in the market. Timely action is needed to overcome this situation
by taking corrective and proactive steps, then and there. Rupee values in the global
market has affected in the past few months thus making it extremely difficult to be
competitive at a time when some of our major competing countries are depreciating against
dollar and exporters are being badly affected. Indian textile industry needs to overcome
some of the threats looming large in this front.
ii. REAL ESTATE BUSINESS
Industry Structure and Development
During the first half of the financial year 2022-23, the global economy encountered
various difficulties, including fluctuating prices of essential goods and resources,
elevated inflation, and disruptions in supply chains resulting from the Russia-Ukraine
conflict. However, the economy demonstrated resilience in the second half as it began to
recover from the impacts of the pandemic and geopolitical tensions. Central banks
implemented synchronized rate hikes and stricter monetary policies to effectively address
these challenges, combat inflation and stabilize the markets.
Indian Economy
The Indian economy remained relatively robust amid global economic headwinds. This
buoyant performance along with overall optimism and compelling macro-economic indicators,
exemplify strong economic fundamentals for the country. India has emerged as one of the
fastest growing major economies and clocked a growth of 7.2% in financial year 2022-23,
reveals the National Statistical Office.
Stronger prospects for manufacturing, services, agriculture and related industries,
along with improved business and consumer confidence, are expected to support domestic
consumption. Additionally, the nations stable inflation rates, increased disposable
income, and focus on infrastructure development are anticipated to propel economic growth
in the future.
OPPORTUNITIES AND THREATS: Opportunities:
• Strong demand for real estate, especially in the affordable housing segments,
provides a significant opportunity for developers.
• Ongoing Infrastructure development projects, such as development of smart
cities, transportation networks create opportunities for real estate developers.
• Adoption of technology in real estate opens numerous opportunities. Developers
that embraces technological advancements can gain a competitive edge and cater to the
evolving preference of tech savvy customers.
• Rising demand for sustainable buildings offers significant opportunities for
developers, as green buildings with energy-efficient features attract environmentally
conscious buyers and tenants.
• Government initiatives and policy reforms, such as the Pradhan Mantri Awas
Yojana (PMAY), the Real Estate Regulatory Authority (RERA) and tax incentives, create a
favorable environment for real estate development.
Threats:
• As the real estate industry continues to evolve, the industry faces a multitude
of threats and challenges. Rapid technological advancements, changing market trends, and
regulatory complexities pose constant hurdles. Moreover, competition intensifies as new
players enter the market. Navigating these obstacles requires strategic planning,
innovation, and adaptability to ensure continued success in this dynamic landscape.
a. Outlook
The real estate business performance was satisfactory for the financial year 2022-2023,
As the Indias property market has struggled in the year amid high bank interest rates and
slowing economy but by introducing various measures, the government has given boost to the
sector by inspiring confidence to the builders as well as the buyers. With a
customer-centric approach, their new-age structures redefine the real estate landscape,
exceeding conventional expectations.
b. Challenges
The major challenges to our business are constraints of funds, human resources, change
in government policys and legal compliances.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: -
The Company has in place well established framework of internal control system which
commensurate with the size and complexity of its business. The Company has an independent
internal audit function covering major areas of operations and is carried out by external
firms of Chartered Accountants engaged for this purpose.
STATEMENT OF CAUTION:
Statements in this Management Discussion and Analysis describing the Companys
objectives, projections, estimates and expectations may be ‘forward looking
statements within the meaning of applicable laws and regulations and based on the fact
that the Resolution Plan for the Company has been implemented. These statements have been
based on current expectations and projections about future events. Wherever possible, all
precautions have been taken to identify such statements by using words such as
‘anticipate, ‘estimate, ‘expect, ‘project, ‘intend,
‘plan, ‘believe and words of similar substance in connection with any
discussion of future performance. Such statements, however, involve known and unknown
risks, significant changes in political and economic environment in India or key markets
abroad, tax laws, litigation, labour relations, exchange rate fluctuations, interest and
other costs and may cause actual results to differ materially. There is no certainty that
these forward-looking statements will be realised, although due care has been taken in
making these assumptions. There is no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise.
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