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AHIMSA INDUSTRIES LIMITED AHMEDABAD ECONOMIC REVIEW
The plastics industry in India has developed and diversified significantly since its
inception in 1996. The Indian plastics industry market has now grown to become one of the
leading sectors in the countrys economy, employing more than 4 million people. India is
also one of the worlds top exporters of plastics products. The industry manufactures and
exports goods.
The PET preforms industry has expanded its market reach globally, with emerging
economies showing significant growth potential. Increasing urbanization, rising disposable
incomes, and changing consumer lifestyles have fueled the demand for PET preforms in these
markets.
India has increasingly adopted free market principles and liberalized its economy to
international trade after a fiscal pricing in 1991. The reforms largely favored industrial
growth in country. Hence, the countrys economic growth progressed at a rapid pace with
relatively large increases in per capita incomes.
RECENT DEVELOPMENT
The PET preforms industry has expanded its global presence, with emerging economies
showing significant growth potential. Increased urbanization, changing lifestyles, and a
growing middle-class population have boosted the demand for PET preforms in these markets.
Data Bridge Market Research analyses the polyethylene terephthalate (PET) preforms
market will exhibit a CAGR of 5.66% for the forecast period of 2022-2029 and is expected
to reach the USD 29.88 billion by 2029.
PET preforms are the preparatory products that are used in the molding and formulation
of PET materials into various shapes, sizes, and products. These preforms are used to make
various shapes of bottles, jars, and packaging products, and they are introduced into the
blowing machine to go through several procedures that allow the PET material to be
adjusted as needed.
The rising demand for packaged drinking water and beverages will influence the growth
rate of the polyethylene terephthalate (PET) preforms market. Favorable properties of PET
as packaging material the key elements driving market expansion. Along with this,
increasing consumption in carbonated soft drinks and water will increase the demand for
the polyethylene terephthalate (PET) preforms market. The polyethylene terephthalate (PET)
preforms market is also being driven by significant factors such as the upsurge in the
level of disposable income and upgrading lifestyle of people. Furthermore, continuous
thrust on product development will enhance the growth rate of polyethylene terephthalate
(PET) preforms market. Also, consumerism and increasing urbanization will act as major
factors influencing the growth of polyethylene terephthalate (PET) preforms market. The
advancement in technologies and rising adoption of product in cosmetic and healthcare
sector will have positive impact on the growth rate of polyethylene terephthalate (PET)
preforms market.
Moreover, expansion of end-user industries and the use of PET in new application such
as edible oil, beer, pharmaceuticals and dairy will create beneficial opportunities for
the growth of the polyethylene terephthalate (PET) preforms market. Additionally, rise in
the demand from developing countries and untapped potential in emerging market will
provide lucrative opportunities for markets growth.
The sentiment of Indian Industry was positive due to change in Government. The economy
was showing the sign of returning to growth path and fiscal & current account deficit
were lower. Effects of demonetization and Goods & Service Tax (GST) have highly shown
in the whole Indian Economy. The manufacturing sector was benefited from lower interest
rates, stable commodity prices & falling oil prices. However, there was a need of
Government focus on infrastructure and require greater attention for overall growth of
manufacturing & economy of India.
It is expected that the Indian economy is poised for higher growth beating growth rate
of China in coming year. There are positive signs for such expectation like inflation are
in control, oil prices are stable at lower level, interest rates expecting to fall
further, stable commodity prices and positive expectation from present Government on
reform & policy matters.
Ahimsa is continually researching ways to further improve quality, to increase and
develop the barrier qualities of PET, and to renew and optimize the preform and bottle
Designs.
INDUSTRY STRUCTURE AND DEVELOPMENT
Indian plastic and beverages market is highly competitive. Your company had focused on
quality product to sustain its business and performed satisfactory on Indian market &
done reasonably well on export front.
“Greenpet” a brand deals in various ranges of products that can suit all
applications and different kinds of budgets. Consumers prefer Greenpet preforms for its
quality, colour, finishing, etc.
“AHIMSA INDUSTRIES LTD.” with its constant Endeavour for innovation will
continue to introduce many new and innovative products both for domestic as well as
International markets and thereby will fulfil its commitment to the society as a whole by
offering premium quality products at the most affordable prices.
The Company is also judging the consumer taste in timely manner and introduced few new
designs of Pet Preform articles. The company has developed market for its products in
domestic as well as international geographies.
PRODUCT WISE PERFORMANCE
The Company has dealing is single segment i.e. in pet performs. Indian plastic &
beverage market is highly competitive. But our company has always put great emphasis to
sustain satisfactory performance by focusing on quality product to its customers and by
performing reasonably well on export front.
During the year under review; the company having 87 % of Pet Sales, 4% of Resign sale
and 9% of other sales from the total turnover of the company.
OPPORTUNITIES AND THREATS
The use of PET packaging products is increasing day by day. Changing life style,
urbanization are pushing FMCG sector to use PET Packaging products in new innovative and
trending ways to increase the sales by attracting the end users of the final products.
Keeping in view the increased demand in PET packaging products, the Company continuously
work on developing the products in trending ways to attract the more and more customers.
The 500-1000ml segment held the largest share in the PET Preforms market share in 2021
and is anticipated to grow at a CAGR of 3.9% during the forecast period 2022-2027. PET
Preforms have a high demand for manufacturing 500-1000ml capacity bottles as they are
mainly used as packaging products in the food & beverage sector for ready-to-drink
items such as juices and carbonated drinks items such as soft drinks. The consumption of
beverage items especially soft drinks and juices is growing rapidly among adults on
account of an increase in disposable income, thereby increasing the demand for 500-1000ml
of capacity bottles for packaging purposes.
However, despite having a good growth potential, the plastic packaging industry faces
many threats in terms of health hazards, government bans, fluctuating raw material prices
and competition. Some of the players present in the industry follow unethical practices to
increase the revenue by selling poor quality products which may look similar but are
hazardous to the environment.
The growing shift towards sustainable packaging solutions reduces the usage of PET
Preforms which can negatively impact the PET Preforms market size during the forecast
period.
To overcome these challenges, significant efforts will have to be made by all the
stakeholders to realize the real potential of this industry.
In a recent report of Council of Scientific and Industrial Research (CSIR), it has
declared PET material to be safe for storage of water and packaging of food products.
RECENT TREND AND FUTURE OUTLOOK
In recent years Indian economy under the new government has gathered strong momentum.
The company is optimistic about the recovery of Indian economy and the capital market. The
country has to grow economically to with stand any international pressures from foreign
countries. The way to economic growth begins with capital market development. The capital
market industry in other words is backbone to economic growth in country.
Since its foundation, the production of PET packaging in the form of preforms and
bottles has been the core business of Ahimsa. The preforms are blown into bottles by
Ahimsa or by the customer, and then filled with water, soft drinks, edible oils, ketchup,
milk, fruit juices, etc.
RISKS AND CONCERNS
The company is exposed to several potential risks like technological changes, political
risks, product distribution both from internal and external sources but the same can be
anticipated and curbed by addressing them in its early stages for a long-term corporate
success.
The Company is of the opinion that recycling & reuse of plastics are expected to
increase in our Industry, thus effecting the development innovation and sustainability
too.
Ahimsa endeavors to achieve a global spread of risk and maximum flexibility. The strong
position of Ahimsa is the result of very high productivity, its technological leadership
whereby quality and innovation come first, and its extensive geographic distribution. The
production is highly automated and the production technology has to a large extent been
optimized in-house. In addition, the Board and the Audit Committee of the Company
periodically reviews the risk management procedures and takes various preventive measures
to mitigate the risk factors.
DETAILS OF KEY FINANCIAL RATIOS
Sr. No |
Particulars |
Standalone |
Explanations |
|
|
2022-23 |
2021-22 |
|
1 |
EBIDTA/Turnover |
2.78% |
4.26% |
In the current year we changed machinery line and that lead to
downtime of machine & trial runs which affected profitability. |
2 |
Debtors Turnover Ratio |
3.94 |
3.99 |
Though there is small decline, company is having has good liquidity
resulted in least use of cash credit. |
3 |
Inventory Turnover Ratio |
3.56 |
3.10 |
It is almost constant comparing with last year, due to strong
purchasing pattern. |
4 |
Interest Coverage Ratio |
2.94 |
1.21 |
This year by managing working capital well, we ended up to save
interest cost. |
5 |
Current Ratio |
2.47 |
2.28 |
Company has enough liquid asset to cover short-term liabilities. |
6 |
Debt Equity Ratio |
0.06 |
0.09 |
Better utilization of operation fund lead to underutilization of CC
limit, and hence better debt/equity ratio. |
7 |
Operating Profit Margin (%) |
-2.61% |
-1.36% |
This year due to change in production line and fluctuation in resin
rates, profitability is affected. |
8 |
Net Profit Margin (%) |
0.47% |
1.28% |
This year due to change in production line and fluctuation in resin
rates, profitability is affected. |
9 |
Return on net worth (%) |
0.7% |
2.07% |
This year due to change in production line and fluctuation in resin
rates, profitability is affected. |
10 |
Book Value per share (Rs) |
10 |
10 |
- |
11 |
Earnings Per Share (Rs) Basic |
0.17 |
0.52 |
This year due to change in production line and fluctuation in resin
rates, profitability is affected. |
12 |
Earnings Per Share (Rs) Diluted |
0.17 |
0.52 |
-- |
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The company has implemented proper system for safeguarding the operations/business of
the company, through which the assets are verified and frauds, errors are reduced and
accounts, information connected to it are maintained such, so as to timely completion of
the statements. The Company has adequate systems of Internal Controls commensurate with
its size and operations to ensure orderly and efficient conduct of business. These
controls ensure safeguarding of assets, reduction and detection of fraud and error,
adequacy and completeness of the accounting records and timely preparation of reliable
financial information.
The company gets internal audit and verification done at regular intervals. The
requirement of having internal auditor compulsory by statue in case of listed and other
classes of companies as prescribed shall further strengthen the internal control measures
of company.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT
Your Company has undertaken employees development initiatives, which have very
positive impact on the morale and team spirit of the employees. The company has continued
to give special attention to human resources and overall development.
CAUTIONARY STATEMENT
Certain statements in the reports of the Board of Directors and Managements
discussions and analysis may be forward looking statements within the meaning of
applicable securities laws and regulations. Actual results could differ materially from
those expressed or implied since Companys operations are influence by many external and
internal factors beyond the control of the Company. The Company assumes no responsibility
to publicly amend, modify or revise any of these statements on the basis of any subsequent
developments, information or events.
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