bambino agro industries ltd share price Management discussions

Operational and Financial Performance during the yean

The performance in respect of production, sales & financial parameters for the Financial Year 2022-2023 in comparisonto lastyearisasfollows: ^ j_n :_gcs

SR. No.	Particulars	Year Ended 31st March 2023	Year Ended 31st March 2022
1.	Production (in MetricTonnes)	43,652	35,107
2.	Sales (in MetricTonnes)	45,219	38,444
3.	Sales Turnover	30,319.73	25,732.27
4.	Profit Before interest, depreciation, tax & other adjustments	2,298.25	2,428.95
5.	Net Profit/(Loss) aftertax & other adjustments	921.38	885.23

Industry structure and development

The Indian economy demonstrated remarkable resilience by positioning itself for a return to pre-pandamic growth levels. It emerged as an outliner, achieving the highest growth rate among the major large economies thereby emerging as the worlds fastest -growing economy.

However, there were certain challenges in the food industry. It was significantly impacted by high commodity prices, rising interest rates, and the continuing impact of Russia-Ukraine war during the year. Further, the longterm effects of these factors continue to be felt giving rise to fears of an impending recession in major economies.

Your Company operates in the packaged food segment mainly comprising of processed & packaged foods viz., Macaroni, Pasta, Vermicelli, Dalia, Soya chunks, Wheat flour, and instant-food products like Instant Soups, Instant food mixes, Gingergarlic paste, etc.

Although commodity prices were volatile and inflation was at unprecedented levels, the post-covid normalization of economic activities supported growth throughout the year. India was one of the fastest growing economies in the world with healthy domestic demand backed by substantial investments in infrastructure. The major challenge confronting the food industry was managing inflation in the cost of key commodities like wheat, edible oil, and crude oil, all ofwhich were trading at multi-year high prices.

Your Company was successfully able to overcome these challenges by focusing on the strategic pillars of innovation, brand building, and distribution in orderto sustain growth and profitability. Sensible procurement decisions helped your Company to ensure availability and to overcome volatility in prices of our most important commodity i.e. Wheat. Careful price increases were also actioned to mitigate the effects of rising commodity prices. Your Companys assessments and strategies are outlined in this report and are to be read in context of the evolving situation.

Opportunities and threats

Pasta and Vermicelli

Due to increasing levels of household penetration in pasta category, the potential for growth in this category is immense. The per capita consumption of Pasta in India continues to lag behind the levels seen in developed countries. The possibilities for increasing consumption through innovative, healthy, and superior offerings in this category are numerous, which positions yourCompany in a good space forfuture growth and expansion.

There has been an increased entry of many new players along with the entry of private labels in the category.

However, through our wide distribution, increased focus on innovation, and new offerings, your Company has been able to increase its share of wallet in this space.

Soya

Your Company has entered into this new category last year which has synergies with its existing distribution. Your Company has made inroads and good initial progress in this space and will continue to grow its market share in this segment.

Instant Foods

Your Company continues to focus on some key areas in Instant foods space that align with its distribution and brand strength. The opportunities in this space continue to grow and your Company shall continue to maintain selective focus in this space in coming years.

Future outlook

Despite apprehensions about global recession, businesses in India are optimistic about demand conditions. The trajectory for inflation during the coming year will depend on a host of domestic and global factors. The outlook forfood prices and rural growth will depend significantly on climaticfactors and adequacy of monsoon rainfall.

Wheat prices are expected to remain high on account of high input costs and good demand. Global weather conditions like "El Nino" might effect Wheat crop and policy on Wheat exports/imports may play a crucial role on input cost of this commodity. Prices of other essentials like edible oil, fuel, sugar and milk powder continue to be subjected to high uncertainty. However, it is expected that a good crop will help keep prices in check and strengthen rural demand. The governments focus on capital expenditure, private sector manufacturing, and service activity should also support income generation and boost economic activities.

Your Company expects to continue its high performance on the strength of its hardworking and creative team, strong brand, and wide distribution network. These factors will continue to fuel growth and expansion.

Your Companys International Business managed to grow and expand to new geographies during the year. The International Business witnessed good double-digit value growth in APAC and Americas mainly through the change in product mix and distribution strategy. The Company could enter new geographies in Middle East in this year.

Our purpose includes optimal leverage of available resources, enhancing our operational structure, and consistently delivering value.

Financial and Operational Performance

Particulars	31st March 2023	31stMarch 2022
Total Revenue	30510.23	25764.15
Profit before tax	1300.07	1302.85
Net Profit	921.38	885.23

Significant Financial Ratios

As per provisions of SEBI (LODR) Regulations, 2015, the significant financial ratios are given below:

Particulars	2022-23	2021-22	Reasons
1. DebtorsTurnover(times)	6.24	5.77	Increase in Debtors turnover due to increase in credit sales.
2. Inventory turnover (times)	4.07	3.57	In line with turnover there is slight increase of inventory
3. Interest Coverage ratio (times)	3.06	1.93	As on March 2023 Rs 630.23 lacs & March 2022 Rs 828.66 lacs Due to Repayment of Loans and Reduction of Interest rates.
4. Current Ratio (times)	1.58	1.92	Decreased due to reduction ofadvances
5. Debt equity Ratio	1.41	1.13	On account of repayment of long term debts.
6. Operating Profit Margin (%)	6.36	5.06	increased operating profit on account of decreasing of interest cost
7. Net Profit Margin (%)	3.03	3.44	decreased on account ofincrease of material cost
8. ReturnonNetworth(%)	11.5	11.05	Improvement of net profit

Risks & concerns

The global economy is becoming uncertain due to turmoil in financial markets, geo-political tensions, persistently high inflation and recessionary trends. These factors along with tight global financial conditions, protectionist trade policies and climatic changes due to global warming pose significant risks to growth.

While the Indian economy has shown remarkable resilience and growth so far, it may not be immune to a long term global slowdown or recession in advanced economies.

Any shortfall in monsoons due to onset ofEl Nino conditions as forecasted, would also have a higher impact on rural consumption and the Indian economy as a whole.

Interest rate increase and tight money market conditions are expected to result in moderate growth rate in India.

Availability and prices of input materials like wheatand edible oil could be affected, thereby posing severe risks to the business growth.

Your Companys continued performance and growth would depend largely on the effective management of commodity inflation and volume growth while optimally managing the price increases in a subdued demand environment.

Consumer sensitivity to price increases in our core categories, migration to low cost products, intense competition, lower purchasing power and changing consumer preferences could pose challenges to your Companys future growth prospects.

Internal Control Systems and theiradequacy

The Company has an adequate internal control system to commensurate with the size and complexity of the organization. The Company has undertaken a comprehensive review of all internal control systems to take care of the needs of the expanding size of the Company and also upgraded the IT support systems. A system of internal audit to meet the statutory requirement as well as to ensure proper implementation of management and accounting controls is in place. The Audit Committee periodically reviews the adequacy of the internal audit functions.

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Human relations/lndustrial relations

The Company continues to provide extensive training to its sales team to improve its product knowledge and selling skills. The employees are motivated by creating employee friendly working environment and attractive compensation management. The relation with workers and employees remained cordial during the year under review. The Company employed 316 employees during the year.

Cautionary Statement

Statement in this "Management Discussion & Analysis" may be considered to be "forward looking statements" within the meaning of applicable security laws or regulations. Actual results differ materially from those expressed orimplied, important factors that could make a difference to the Companys operations include Indian demand supply conditions, raw material availability and prices, agricultural yield, Government regulations besides otherfactors such as litigations and court cases.

	Forand on behalfofthe Board ofDirectors of Bambino Agro Industries Limited
Place: Secunderabad, Telangana Date: 28th August 2023	Shirisha Raghuveer Myadam Chairperson and Managing Director DIN 07906214