autoriders international ltd share price Management discussions

Autoriders International Limited, an established and reputed company engaged in Car Rental Services is poised for exponential growth and strive to sustain and enhance its presence in the industry by improving its service standards by upgrading its fleet in terms of models and numbers, technology and its human resources resulting in adding value for its customers and stakeholders.

The company achieved Gross Revenue of over Rupees 70.90 crores and profit Before Tax of Rupees 6.76 Crore. Also, the company is looking at various business streams for revenue enhancement and cost containment measures so as to improve its profit.

1. Industry Structure and Development

Travel & Tourism Industry in India has a significant potential as it is one of the popular travel destination of the world with huge market with growing population in major cities and towns. It offers varied segments of corporate travelling, medical, wellness, adventure, eco-tourism, and rural and religious tourism for domestic and international tourists. Travel and Tourism is an important source of foreign exchange in India. The domestic tourism expected to drive growth due to the increasing middle class and disposable income.

Corporate car rental market in India has reached to its pre-pandemic level and is expected to maintain and enhance growth in view of a surging economic development. During the F.Y. 2022-23, the Company has achieved a remarkable good growth in terms business and profit. The Board of Directors are making all the efforts to maintain same pace in the ensuing years.

To achieve the expected growth, huge investment is required for fleet acquisition, technology upgradation in the form of online booking platforms and software, online payment processing, smartphone apps, GPS tracking devices and software etc. There is an essential need to identify and implement latest technological innovations and software applications for development of car rental industry.

2. Opportunities

The industry has effectively withstood the effects of Covid-19 pandemic and travel & tourism industry including car rental business has bounced back with remarkable growth in revenue and margins touching. The car rental industry is expected to enhance the growth with introduction of new business models introducing new technology applications and its upgradation. Car leasing and car sharing business also can be growth drivers in the coming years. By systematic fleet management introducing of new fleet considering the current and future market trends and operating system upgradation, company is hopeful of improving its business in terms of revenue and margins.

Considering the global warming effects and sustainability, the Company is trying to get into the business of using environment friendly Electric Vehicle as well.

3. Segment wise or product-wise performance

The Company has a single segment reporting during the year. The performance of the product is quite satisfactory and Board is willing to continue the efforts in a single segment of automobile.

4. Outlook

The future outlook of travel and car rental industry look quite positive as reflected by the quick recovery and upward growth of business after the pandemic period. It also depend on the other economic, social and political environment prevailing in the country as well as globally. The friendly relation between countries will ultimately boost our business.

5. Threats, Risk and Concerns

Occurrence of situations Pandemic in future will adversely affect the industry in general. The company is also subject to competition from aggregators entering into corporate sector with low rate of app-based service. The company is fully capable to consolidate its position against of such competition.

The increase in competition and the input costs could put pressure on the margin. However the company is hopeful of maintaining its margin by taking appropriate measures of monitoring and analyzing various aspects in operations and management, receivable management, human resources and other functional areas to that effect.

Also, the deteriorating relationship between countries and terrorist activities would negatively impact the industry globally. However, constructive dialogue between various nations to defuse tension and steps taken by the governments all over the world to counter terrorism would improve the situation.

4. Internal Control Systems

The Company has an internal control system in place which is commensurate with the size and nature of its business. The internal control system ensures that all the assets of the Company are safeguarded from loss, damage or disposition. Checks and controls are in place to ensure that transactions are adequately authorized and recorded and that they are reported correctly. The internal control system is supplemented by an extensive programme of internal audit by a firm of independent Chartered Accountants and external statutory audit which is periodically reviewed by the management and Audit Committee.

However, the Company could review the internal Financial Control during the year due to lack of resources and time to conduct the same. However the Company will try to implement the same for the F.Y. 2023-24.

5. Financial Performance with respect to Operational Performance

Sales and Profit:

During the year Gross Sales has increased by 111.10% and an increase of 129.93% was seen in the Net profit.

Capital Investment:

Capital Investment of Rs. 21.39 Crores were made during the year. The entire capital investment has been made out of financial assistance from AU Small Finance Bank Limited, Toyota Financial Services India Limited, The Karur Vysya Bank Limited, Cholamandalam Investment And Finance Company Limited and Yes Bank Limited.

6. Human Resources and Industrial Relations

The Company’s HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity: to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel. Industrial relations were cordial and harmonious throughout the year.

7. Details of significant changes (i.e. Change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor

No 2022-2023 2021-2022 / Decrease
i. Debtors Turnover (Rs) 6.01 4.50 33.56 Improvement due better credit policy
ii. Inventory Turnover (Rs) - - - Not applicable
iii. Interest Coverage ratio (%) 5.85 3.19 83.39 Due to better margin
iv. Debt equity Ratio 1.36 1.27 7.09 Increased volume and profits
v. Operating Profit Margin (Rs) 41.99 44.54 -5.73 Increase in operating cost
vi. Net Profit Margin (Rs) 9.49 9.04 (4.98) Increase in operating cost, Depreciation & Interest

8. Details of any change in return on net worth as compared to the immediately previous financial year along with a detailed explanation thereof:

Sr No Particulars %/Amount (in lacs) % Increase / Decrease Explanation for change
2022-2023 2021-2022
i. Return on Net Worth (Rs.) 29.05 18.46 57.37 Increased volume and profits

9. Cautionary Statement

Statements in this Management Discussion and Analysis describing the Company’s objectives, projections, estimates and expectation are “forward looking statement” within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

By order of the Board,
Place: Mumbai
Date: 04th September, 2023 Sd/-
Chintan Patel
Managing Director & CEO
DIN:- 00482043