Economic Developments and Industry View
Over the course of the past year, the global economy has experienced numerous
challenges in the form of geopolitical tension, rising interest rates, high inflation
levels. Alongside, the consequences of a sudden surge in COVID-19 cases in China also
impacted growth projections.
As per the latest estimates by the International Monetary Fund, the global GDP growth
rate is estimated to be 4.5% in CY23 showing resilience towards the recessionary fears. On
account of these headwinds, supply chain disruptions were also rampant. Moreover, due to
geopolitical conflicts, crude oil prices soared, global trade was impacted and
inflationary pressures worsened. To rein in inflation, Central Banks across the world,
including the US Federal Reserve, responded with synchronised rate hikes.
A stronger boost from pent-up demand in numerous economies or a fall in inflation is
expected in the course of 2023. The emerging and developing economies of the world are
likely to play a major role in accelerating global economic growth. Another silver lining
is the fact that global inflation is likely to decline from *8.8% in C.Y. 2022 to 6.6% in
C.Y. 2023 and 4.3% in C.Y. 2024
Indian economic overview
The Indian economy remained remarkably resilient to global challenges in F.Y. 2022-23.
This is evident by robust domestic demand and upbeat investment activity. Sectoral
analysis reveals that growth was driven by robust construction activity aided by increased
infrastructure investment both by the Central Government and State Governments, which
paved the way for large-scale employment opportunities. Building on the gains of first
half of the fiscal year, the second half continued to see a gradual upswing in demand and
economic activity. While post-covid, private investment recovery is still at a nascent
stage, there are early signals, which indicate that India is poised for a stronger
investment upcycle in both manufacturing and services sectors. The number of private
investment projects under implementation in the manufacturing sector is also steadily
growing.
Outlook
Despite high inflation, the Indian economy has achieved GDP growth of 7.2% in F.Y.
2022-23. Sustained growth in GST collections, electronic toll collections and the volume
of e-way bills generated indicate encouraging momentum. Indices of manufacturing activity
such as the PMI-manufacturing, the Index of Industrial Production and the Index of Core
Industries (ICI) demonstrate that manufacturing activity continues to grow steadily.
Indicators of the services sector (UPI transactions, high credit demand) also point
towards sustained expansion.
To drive the virtuous cycle of infrastructure investment and job creation, the Union
Government has considerably increased the capital expenditure outlay to H10 Lakh Crore,
which is 33% higher than the previous year. The increase in infrastructure spending,
especially in tier II and tier III cities is anticipated to have a substantial effect on
the Indian economy, generating new employment opportunities and stimulating growth.
Overall, the demand conditions in India remain conducive to supporting economic
activity. India faces the coming financial year with confidence imparted by underlying and
overall macroeconomic stability, while being on the alert against geo-political and
geo-economic risks.
Industry overview
For any economy, the logistics sector, encompassing transportation, warehousing, cargo
consolidation and border clearances, would form the backbone of its trade and associated
economic activity and growth of key sectors. The cost of trading whether by sea, land or
air forms a critical component of the final price of a commodity. An efficient logistics
system reduces this cost, providing a competitive edge and propelling economic activity.
Growth of the Logistics business is directly correlated with economic activity. With the
Indian economy on a revival path, we believe Indias Logistics sector is poised for
accelerated growth. Infrastructural bottlenecks that have stifled growth of the sector and
have promoted inefficiency are being addressed. Looking at the future growth prospects;
India is currently considered the most attractive in the world and might emerge as a major
logistics hub in the future. With this forward looking attitude and a promise of growth
and improvements, the service oriented logistics industry is all set to expand beyond the
horizons.
India offers huge opportunity for investment. The Central and State Governments are
focusing on the development and inclusive growth. With several policy measures announced
by the Government coupled with seamless execution, focus on process improvement, providing
end to end solutions to customer and quality of operation, the company continues to
delivery in its focus areas of logistics, trading in lubricants and investment and finance
activities.
Outlook on Opportunities
Logistics is one of the most important basic industries for any economic growth as it
is the management of the flow of products from the place of their origin to the place of
their consumption, thus the industry also involves the integration of material handling,
warehousing, packaging, transportation, shipping security, inventory management, supply
chain management, procurement, and customs service.
The Logistics sector in INDIA has today become an area of priority. One prime reason
for the same stems from the reason that years of high growth in the Indian economy have
resulted in a significant rise in the volume of freight traffic moved. The large volume of
traffic has provided for growth opportunities in all facets of logistics including
transportation, warehousing, freight forwarding, express cargo delivery, container
services, shipping services etc. The growth path also suggests that increase demand is
being placed on the sector to provide the solutions required for supporting future growth.
Strength of the logistic sector is likely to be one of the key determinants of the pace of
the future growth of the economy.
The logistics industry is a dynamic component in the countrys growth wheel which has
also recently witnessed the effect of demonetisation followed by remonetisation (issue of
new currency notes). This sudden shift has significantly disrupted the overall business
operations of logistics, automobile, FMCG, pharmaceuticals and agriculture sectors. Though
this move by the government gave a temporary jolt but, in the long run, there will be an
increment in the overall business coming in from the international players.
Digitization is a new reality which is critical to transforming India going forward. It
will help to bring better regulation and governance in the industry.
Where the industry is now moving towards cashless mode, being future ready has always
encouraged business operations through cashless mode. With this futuristic vision, it has
successfully carried out 55% of its business transactions through the digital mode of
payment.
The primary reason for growth in the finance and investment industry can be attributed
to increasing trade reforms in Government policy, increased Government spending on finance
and investment sector and rise in domestic consumption. The Company has successfully
implemented the growth strategy and expansion. The changes in the political and social
conditions, the monetary and interest rate policies of India and other countries have also
helped in maintaining the momentum in the finance activities of the Company.
Outlook for Threats, risks and concern
We operate in a very competitive industry, with many unorganized players. Many segments
within the logistics industry are highly commoditized and have low barriers to entry,
leading to a market with a very high degree of fragmentation. In the recent past, startups
and international logistics companies have entered the India market. Competition from
these segments is likely to increase. We will need to stay ahead of our competition
through consistent investments in modern technology and focus on service quality and
value-added services. The cyclical fluctuations due to economic recession, downturn in
business cycle, interest rate fluctuations and other economic factors beyond control has
posed a serious threat on the Company policies in finance sector. Newer regulatory updates
pose a constant challenge for smooth operations of the Company. Higher cost of funds might
lead to reduced bottom-line for the Company. Like in most other industries, opportunity
brings itself competition. The different levels of competition in each segment have led to
the price cutting as well.
The Indian logistics industry is fragmented and under developed. Logistics costs are
relatively high due to poor physical and communication infrastructure; high dwell time at
ports; low levels of containerization; and a multi-layered tax system contributing to
significant delays at border crossing points.
Human Resources/Industrial Relations
The Company has continuously strive to attract and retain the best talent from the
local markets; clearly define their roles and responsibilities; include them into robust
performance management systems; create an inspiring and rewarding work environment; engage
them into an inclusive work place; impart training and create development opportunities
for increasing employee knowledge and efficiency to make them future ready; and create
career opportunities within.
The Company is committed in ensuring that the work environment at all its locations is
conducive to fair, safe and harmonious relations between employees. It strongly believes
in maintaining the dignity of all its employees, irrespective of their gender or
seniority. Discrimination and harassment of any type are strictly prohibited. The Company
ensures that no employee is disadvantaged by way of gender discrimination.
Segment Wise or product wise performance
Due to the timely execution of the services and efficiency in implementation of
policies of the Company, there has been the growth in all the sectors of the company i.e.
trading in lubricants, transportation and finance and investment activities from last
years performance. With superior methodologies and improved process and systems, the
Company is well positioned to lead a high growth path. The details can be extracted from
the notes to accounts.
Cautionary statement
Certain statements in the Management Discussion and Analysis describing the Companys
objectives, predictions may be “forward-looking statements” within the meaning
of applicable laws and regulations. Actual results may vary significantly from the forward
looking statements contained in this document due to various risks and uncertainties.
These risks and uncertainties include the effect of economic and political conditions in
India, volatility in interest rates, new regulations and Government policies that may
impact the Companys business as well as its ability to implement the strategy. The
Company does not undertake to update these statements.
| (Saurabh Sindhu) |
(Rudra Sen Sindhu) |
| Director |
Director |
| Din no.-02291158 |
Din no.-00006999 |
+91-9892691696
