INTRODUCTION
The Management Discussion & Analysis (MDA) of your Company for the
year under review presents a scenario somewhat similar to the previous MDA (2021-22). The
stressed environment and harsh challenges, especially the supply chain bottlenecks and
liquidity issues that affected the financial performance of your Company in FY 21-22
continued to afflict TIL. Despite having a good order book in cranes, reach stackers and
defence equipment, your Company kept grappling with the headwinds and consequentially the
performance in FY 22-23 suffered.
Externally, after navigating a tepid business environment since 2019,
the Construction Equipment (CE) Industry started to recover. As per ICEMA - Indias CE
industry posted an upbeat performance with 26% year-on-year growth in FY 23 as sales
crossed the one lakh unit mark driving on road construction and railway demand.
Infrastructure development being the key focus of the Government to stimulate sustainable
growth of the Indian economy, the infra business landscape of which your Company is a key
player, remains positive.
To mitigate the stressed financial scenario by reviving the business
operations and leveraging the positive outlook in CE sector, your Company actively pursued
bringing in a strategic investor during the year under review. This in turn is expected to
strongly position your Company to capitalize on the opportunities in the CE and defence
sector.
BUSINESS PERFORMANCE
On a standalone basis, the turnover of your Company, including income
from operations (gross) and other income for the year under review stood at Rs. 54.69 Crs.
vis-a-vis Rs. 89.26 Crs. in the previous year. The Company has sustained an
operating loss of Rs. 92.09 Crs. during the year under review as compared to an operating
loss of Rs. 143.94 Crs. in the previous year. The Company had to book an exceptional loss
of Rs. 259.53 Crs. during the year ended 31st March 2022 due to provisioning and writing
-off the inventory, trade receivables and certain advances pursuant to re-assessment of
assets post Covid and based on a Management Audit carried out voluntarily by one of the
Promoter Companies. The overall loss before tax during the year under review was Rs. 92.09
Crs. against a loss of Rs. 403.47 Crs. in the previous year. Detailed analysis of the
aforesaid exceptional loss has been provided in the notes to accounts forming a part of
the financial statements of the Company.
The consolidated turnover of your Companys Group including income from
operations (gross) and other income during the year ended 31st March 2023 stood at Rs.
50.53 Crs. compared to Rs. 77.13 Crs. in the previous year. The Group incurred a loss
before Exceptional Item of Rs. 94.72 Crs. during the year under review as compared to a
loss of Rs. 158.63 Crs. in the previous year. The overall loss before tax & after
Exceptional Item during the year under review was Rs. 94.72 Crs. against a loss of Rs.
418.16 Crs. in the previous year.
Despite the distressed financial results posted for the year under
review coupled with ongoing production bottlenecks and delivery challenges, TIL remains
the preferred choice of customers of cranes, reach stackers and defence sector. This was
further reinforced by fresh orders during the year under review and the total order book
including machines and after-market stood at Rs. 233.70 Crs. as on 31st March 2023.
Besides the defence sector which has been bestowing the majority of the
orders on your Company, the other sectors where TIL has received significant orders are:
Coal Mines, Steel Plants, Power and Petrochem to name a few. During the year under review,
your Company received an order for supplying two nos. Special Cranes from Ministry of
Defence under its Make in India drive. Once the field trials for these Special Cranes
are completed, your Company expects significant orders from the Ministry of Defence for
these Special Cranes.
The Customer Support business of your Company maintained its focus on
service and support initiatives in the year under review in order to reach out to
customers 24x7. The use of digital and online modules of technical trainings for customers
enabled your Company to deploy lean manpower and optimize cost. Your Company also carried
out troubleshooting for maximizing machine life, optimizing productivity, and ensuring
maximum return on customers investment.
RISKS & CONCERNS/THREATS & OPPORTUNITIES
The major risks and concerns during the year under review continued to
be supply chain disruptions. This included nonavailability of critical components, both
from imported as well indigenous sources. This had a negative impact on your Companys
production schedules, which in turn translated into severe cash flow and working capital
concerns.
At the macro level, delayed awarding of projects, cost overruns
remained as ongoing risks for the year under review. A recent report by the Infrastructure
and Project Monitoring Division (IPMD) of the Ministry of Statistics and Programme
Implementation stated that the road transport and highways sector of India bore the
maximum number of delayed projects with a significant cost overrun. In the road transport
and highways sector, 402 out of 749 projects are said to be delayed, implying a cost
overrun. National highway construction in India also slowed down to 20.43 km a day during
the first few months of the FY 2022-23 according to ICEMA. Another challenge that emerged
was in the form of the conversion of BS (III) to CEV Stage IV emission norms. As per ICRA,
there has been a 10-20% increase in prices of construction equipment, mainly due to
increasing input costs along with a change in emission norms.
Despite the risks and concerns, the opportunities in infra and CE
sector are bright. Most encouraging aspect as mentioned in last years MDA is that in
spite of the stressed situation and hardships faced by TIL, customers continue to repose
trust in your Company as is evident from the good order book position.
The latest Budget with considerable increase in the outlays for
infra-related sectors brightens the opportunity landscape of CE sector and that of your
Company. Defence continues to be an important opportunity area for your Company. The
Indian Government has set a target of achieving defence manufacturing worth Rs. 175,000
Crs., including defence exports of Rs. 35,000 Crs. by 2024-25. The Government is taking
several initiatives to encourage domestic manufacturing and reduce its external dependence
for defence procurement. The Atmanirbhar Bharat mission has radically changed the economic
landscape of the nation, ushering in huge opportunities in the space in which your Company
operates.
TILs order book for defence as mentioned under Business Performance is
aligned with this and heralds significant opportunities for your Company in medium to long
term. Especially with infusion of funds by the strategic investor, the opportunities
envisaged in the infra sector can be optimally leveraged by your Company.
OUTLOOK
As per FITCH and other rating agencies, the outlook for Indian economy
is stable and is growing on the strength of its domestic demand. The country has
demonstrated resilience and is well positioned to face the global challenges.
The Union Budget 2023-24 has considerably increased the outlays for
infra-related sectors. Infrastructure development has been the key focus of the Government
of India to stimulate sustainable growth of the Indian economy. The Government has
envisaged an investment of Rs. 111 Lakh Crs. for developing the infrastructure projects
under the National Infrastructure Pipeline (NIP) by FY 2024-25. Also, as per ICRA, the
Government of India is all set to accelerate the construction of roads in 2023-24 by
16-21%, with a healthy pipeline of projects and an increase in capital expenditure outlay.
This, along with focus on project completions ahead of general elections, is expected to
boost execution of 12,000-12,500 km in 2023-24. Besides the opportunities in road sector,
the ports sector is also expected to contribute significantly towards the growth of the
economy. The Governments Sagarmala Program is playing a key role in the development of
crucial infrastructure. In addition, the Maritime India Vision 2030 envisions an overall
investment of Rs. 3,000 billion - Rs. 3,500 billion across the ports, shipping and inland
waterways segments. This augurs well with the reach stacker and crane business of your
Company.
As already mentioned, despite the current threats and challenges, your
Company maintains a good order book. Several large fleet customers in the Coal, Steel and
Thermal Plants are expected to refresh their crane fleet, which signifies further infusion
of orders from these organizations for your Company. Also, as per Governments policy to
promote Make in India, no global tenders of value up to Rs. 200 Crs. is to be floated,
and no Chinese equipment may be allowed to work in Road projects, especially in Border
roads, Power sector because of IOT. This signifies positive outlook for the Company as
PSUs will have to procure indigenously manufactured cranes.
Defence is a national imperative and your Company has been engaged with
the defence sector for many years, emerging as a preferred choice of our nations defence
sector. The defence orders received by your Company is more than 50% of the total order
book and TIL continues to put laser focus on leveraging the defence opportunities. With
TILs contribution to the sector, defence PSUs are actively engaged with our team on an
ongoing basis for orders and execution. TIL is actively receiving and participating in
enquiries from defence industry for further orders to the tune of Rs. 500 Crs. Several of
these are in the pipeline and nearing fruition.
Your Company is exploring all possible strategic measures and course
corrections to ensure a rebound and seamless continuation of its legacy so that TIL
remains a trusted and preferred partner in the domestic and global infrastructure arena.
In this context, your Company decided to increase the authorized capital to infuse funds
into the business of the Company, by bringing in a strategic investor, subject to all
requisite approvals. Fresh capital is to be infused by Indocrest Defence Solutions Private
Limited, a part of Gainwell Group. The group has the right synergy with TILs current
product line. Your Company is optimistic that the strategic measure will herald positive
tidings and offer substantial opportunities for a rapid revival. The reports and
recommendations of G20 and B20 emphasize Indias leadership in shaping policies, boosting
both domestic manufacturing and export opportunities, and in turn making Indias economy
more prosperous, inclusive and sustainable.
HUMAN RESOURCE
Due to subdued business performance during the year, recruitment was
absolute minimum and only for critical positions. However, technical trainings were
imparted to customers through digital and online modules.
As on 31st March 2023, the employee strength of your Company stood at
653.
INTERNAL CONTROLS & THEIR ADEQUACY
Your Company has adequate internal financial control mechanisms
commensurate with its size and scale of operations, procedures and policies ensuring
orderly and efficient conduct of its business, including adherence to the Companys
policies, safeguarding of its assets, prevention and detection of frauds and errors,
accuracy and completeness of accounting records and timely preparation of reliable
financial information. During the year under review, such controls were reviewed and no
reportable material weakness either in design or in operation were observed.
INDUSTRIAL RELATIONS
Industrial Relations have been harmonious and cordial with all workmen
and unions during the year under review. Despite the numerous difficulties affecting all
employees, your Company conveys its sincere appreciation for the unstinted support of the
unions and the workmen during the year.
CAUTIONARY STATEMENT
Certain statements made in the Management Discussion & Analysis
Report relating to Companys objectives, projections, outlook, expectations, estimates,
etc., may constitute forward-looking statements within the meaning of applicable laws
and regulations. Actual results may differ from such expectations, projections, etc.,
whether express or implied.
|
For and on behalf of the Board of Directors |
| Kolkata |
Sumit Mazumder |
| 26th May 2023 |
Chairman & Managing Director |
+91-9892691696
