Indian Economy Overview
After Pandemic Indian retail industry emerged as one of the fast-paced and most dynamic
industries due to the entry of several new players. India is the fifth-largest and
preferred retail destination globally. Indias retail sector is expected to drive growth
with retail development taking place not just in major cities and metros, but also in tier
II and III cities. Healthy economic growth, changing demographic profile, increasing
disposable income, urbanization, changing consumer tastes and preferences are some of the
factors driving growth in the organized retail market in India.
Even as the global conflict remained geographically distant from India, ripples
comprised increased oil import bills, inflation, cautious government and a sluggish equity
market. Indias economic growth remained at 6.6% in FY 2022-23. India emerged as the
second fastest-growing G20 economy in FY 2022-23. India overtook UK to become the
flfth-largest global economy. India surpassed China to become the worlds most populous
nation (Source: IMF, World Bank)
Despite global uncertainties, Indias FMCG market stands tall with a forecasted growth
of 7-9% for the full year 2023. Pressure on the consumers and low confidence levels and
high unemployment rate could act as headwinds.
Growth of the Indian economy
|
FY 20 |
FY 21 |
FY 22 |
FY23 |
| Real GDP growth jsa |
3.7 |
-6.6% |
8.7 |
6.8 |
Growth of the Indian economy quarter by quarter, FY 2022-23
|
01FY23 |
02FY23 |
03FY23 |
04FY23 |
| Real GDP growth I%] |
13.1 |
6.3 |
4.4 |
4.9 |
Source: Budget FYJ4; Economy Projections, RBI projections)
Overview: Operational, Customer and Marketing
The Company continues to operate with three large segments of supermarket retailing,
Beauty and wellness and hospitality under various brand names: •
Our Segments
> Retail - 9to9 Super Market (FMCG, Grocery and Utilities retailing))
Companys focus is on Consumer goods, food, fashion and beauty & wellness. Over the
years, the Company has also sharpened its focus on leveraging technology to process and
use the large amount of consumer data that it generates as well as develop omni-channel
capabilities. Many of the capabilities thus developed proved to be useful during the
pandemic conditions to retain customers and attract business during the lockdown also and
other uncertainties.
While the Company continues to invest in building its brands, during the year, the
Company built new capabilities for brand building and customer engagement on digital
platforms and social media
A Quick Review ol financial Performance I or the l;Y 2022_i2 3
> Gross Revenue of Rs. 107.60 Crore& Net Revenue of Rs.96.86 Crore.
> Net Profit of Rs.1.22 crore
> Earnings Per Share* 0.84
> New Addition* 7,h Outlet of Yo! China at Kankarbagh (Patna)
> EBITDA-Rs.4.61 Crore
Discussion of the Financial Performance with respect to operational performance In a
highly competitive environment also, your company has seen a growth in sales which
resulted an increase in Net Profit & EBITDA. Your company has earned gross revenue of
Rs. 107.60 crore through sale against Rs. 97.07 crore in the previous year and net revenue
of Rs. 96.86 crore against Rs.B7.46 crore in the previous financial year, registering a
growth of 10.74% YOY. EBITDA registered a growth by 53.16% in comparison to previous year
and in absolute terms we can say that EBITDA increased to Rs. 4.61 Crore from Rs. 3.01
Crore in previous financial year. Your Companys net profit after tax jumped by 771.43% to
Rs. 1.22 crore from Rs.0.14 crore in the previous financial year.
The increase in EBITDA has been possible due to continued focus in increasing the share
of profitable segment sale. Share of salon business grew by 24.57% to 5.92% of total
sales. Similarly, sale of Food & Beverages grew by 26.18% of 24.48% of total sales
& Retail have also seen an increase in sales by 5.23%.
Business Outlook Strengths
The Company believes that following arc some strengths of the Company which provides it
competitive advantage.
Strong management team
We have an experienced professional management team possessing strong capabilities in
various aspects of retail business and strong relationships with its various stakeholders
as well as in-depth knowledge of the localities in which the Company has expansion plans.
Our management team is complemented by a committed work force which enables us to operate,
synergize and integrate our front and backend operations efficiently.
Strong Systems and Process
We believe that our systems and processes are our major strength. The Company has
strong focus on systems and processes. We continue to invest in our front and backend
processes and systems and believe that continuous investment in process, systems and
technology results in substantial growth. Our investments in systems and processes give us
the vital edge to be able to predict consumer trends and requirement to hold inventory at
optimum levels and to control the financial performance of the Company.
Business Strategy
Over the last few months, we have put a lot of effort in getting our systems and
processes sorted and today we are amongst the best on that front. Now our next challenge
is to become the preferred shopping destination. In this area, the Company plans to focus
on following:
1. Expanding our product and format range
• We intend to cater to various segments of consumer in Bihar by providing
extensive product range through various lines of the business and formats of retail
trading.
2. Customer Satisfaction
• The Company imparts special training to its employees and sales executives to
ensure that quality service is provided to customers.
3. Improving the store level profitability
• To devise innovative Revenue Share formats for controlled operational expenses
e.g., low rental cost.
4. Maximum utilization of I.T. for low operational overheads and better supply chain
benefits.
5. Streamlining the backend operations.
6. Increasing presence in cities where the Company already has commercially viable
operations & the cities which reflect high potential and commercial viability.
7. Focusing on high margin/high volume products.
Risks and concerns
Execution: Although the Industry growth potentially appears to be immense, we believe
the key risk to our growth is execution risk. The Company has a strong management team and
we believe it would be capable enough to execute varied retail trading formats.
Employee retention: With the entry of new players and Indian economy back on growth
path, we believe that employee retention has become very important
Low margins due to increase in competition: With the entry oflarge number of new
players, the competition in the retail industry has become intense, resulting in pressure
on the margins and introduction of new promotions/discount schemes to attract and retain
the customers.
Internal Controls and their Adequacy
Your Company remains committed to improve the effectiveness of internal control systems
for business processes with regard to its operations, financial reporting and compliance
with applicable laws and regulations. The Company has a proper system of internal controls
to ensure that all assets are safeguarded and protected against loss from unauthorized use
or disposition and that all transactions are authorized, recorded and reported correctly.
Material Developments in Human Resources/lndustrial Relations Front. Including Number
of People Employed:
The workforce is a critical factor in maintaining quality and safety, which strengthens
the competitive position and the human resource policies focus on training and retaining
the employees of the Company. The Company trains employees regularly to increase the level
of operational excellence, improve service and maintain compliance standards on quality
and safety. Employees are offered performance-linked incentives and benefits and the
Company conducts employee engagement programs from time to time.
The Company would like to sincerely appreciate the valuable contribution and support of
employees towards the performance and growth of the Company. The management team comprises
of professionals with a proven track record.
Disclosure of Accounting Treatment:
The financial statements for the year ended 31st March, 2023 have been
prepared as prescribed in accounting standards and there is no change in treatment of the
said accounting standards. Therefore, no explanation by the management is required for the
same.
| Ratios |
Numerator |
Denominator |
31.03.2023 |
31.03.2022 |
Change (%) |
Reason for Variation |
| Current Ratio (in times) |
Current Assets |
Current Liabilities |
1.55 |
1.66 |
(6.62) |
|
| Debt-Equity Ratio (in times) |
Total Debt |
Shareholders Equity |
0.59 |
0.56 |
5.95 |
|
| Debt Service Coverage Ratio (in times) |
Earnings available for debt service |
Debt Service |
4.90 |
3.10 |
57.86 |
Improvement on account of reduction DfdebL |
| Return on Equity Ratio (in %) |
Net Profit after taxes |
Average Shareholders Equity |
4.54 |
1.11 |
309.38 |
Implementation of Cost control measures to improve profitability. |
| Inventory Turnover Ratio (in times) |
Cost of goods sold |
Average Inventory |
4.80 |
4.76 |
0.89 |
|
| Trade Receivables turnover Ratio (in times) |
Total Sales |
Average Trade Receivables |
336.41 |
316.60 |
6.26 |
Setter realisation of receivables. |
| Trade Payables turnover Ratio (in times) |
Total Purchases |
Average Trade Payables |
16.18 |
19.42 |
(16.69) |
Due to liberal credit terms granted by supplier. |
| Net capital turnover Ratio (in times) |
Cost ofgoods sold |
Working Capital |
6.86 |
6.13 |
11.98 |
|
| Net Profit Ratio (in %) |
Profit after Tax |
Total Sales |
1.16 |
0.12 |
856.40 |
Improved profitability due to implementation of cost control measures. |
| Return on Capital employed (in %) |
Earning before Interest and Tax |
Capital Employed |
8.39 |
3.90 |
114.97 |
IncreasedOperating Margin due to favorable market conditions has Improved the
profitability of the company. |
| Return on Investment fln%) |
Earning from Investment |
Total Investment |
3.41 |
6.05 |
(43.65) |
|
+91-9892691696
