batliboi ltd Management discussions

The Management of Batliboi Limited presents the analysis of performance of your Company for the year ended 2022-2023 and its outlook for the future. This outlook is based on assessment of the current business environment and the expectations, estimates and projections of the Directors and Management of the Company. It may vary due to future economic and political development, both in the Indian and international economies and due to other factors beyond control.

A. PERFORMANCE AND OUTLOOK

Batliboi Textile Engineering Group

Business Structure

The Textile Engineering Group comprises of Air Engineering and Textile Machinery.

Air Engineering Division is a leading manufacturer of complete systems for humidification and waste collection for Textile Spinning, Weaving and Knitting plants. Textile Machinery Division supplies high quality imported and indigenous machinery from leading global manufacturers to the Spinning, Knitting, Processing and Garmenting Sectors.

Air Engineering Group:

Industry structure and developments

The textile industry was buoyant and was undergoing capacity expansion with some new green field projects. Because of competition and unusual global increase in raw material prices margins remained under pressure.

Opportunities and threats Opportunities:

The textile industry continues to do well and with introduction of the PLI scheme prospects of business continue to remain satisfactory and encouraging. The textile industry in Bangladesh, Uzbekistan and nations in South East Asia are also offering good prospects for business.

Threats Risk & Concern:

The industry is dependent on global demand for textiles and cotton prices. Uncertainty of this could have an impact on this industry.

Outlook

With healthy order backlog the Company is optimistic

Internal Control System and their Adequacy

The division has adequate internal controls in place.

Textile Machinery Group

BTMG Performance and Outlook

The textile machinery division caters to spinning, knitting and processing requirements of textile industry. The textile industry has done well in the year under review with substantial expansion resulting in large investments. This division received the benefits of this.

Opportunities, Threats and Outlook.:-

Opportunities:

Expected investments in areas of Open End Spinning, Knits Casual wear for both domestic market as well export opportunities.

Increased focus on high productive automated sustainable technologies.

Emerging opportunity due to realignment of global supply chain.

Threats Risk & Concern:

Slow-down in European business due to Russia and Ukraine conflict, investment decisions could be deferred.

Outlook:

We are cautiously optimistic barring any unforeseen circumstances of the above threat and resurgence of the pandemic.

2. Batliboi Machine Tool Group (BMTG) Business Structure

The Machine Tool Group is engaged in manufacturing, selling/trading, and servicing of various types of metal forming and metal cutting machine tools.

Manufacturing: Batliboi manufactures CNC machines viz. Turning Centers, Vertical Machining Center, Vertical Turning Lathes and Double Column Machining Centers. Trading: The Company is also engaged as an agency house representing various overseas reputed companies from Czech Republic, Belgium, Italy, Germany, South Korea, China and Taiwan as well local manufacturers of Metal Cutting and Metal Forming machine tools.

BMTG-MTT

Industry structure and developments

Demand for Heavy Machine Tools came down drastically. The competition has also increased in smaller machines as new players have entered the market. However, a bit of upward trend of demand was observed during last few months.

Opportunities, Threats & Outlook Opportunities

In sectors like fabrication, new entrants have opened up opportunities. The Opportunities have increased for specialized equipment like Isostatic Presses. The slow improvement in demand for heavy-duty machines was observed.

Threats, Risks and concerns

Delay in decision making due to government policies may defer capital expenditure spending. The long time taken by defence sectors in finalizing orders and high amounts of EMD blocked for long periods which has resulted into Principals getting discouraged to participate in tenders.

Performance segment wise or product wise

Improved business demand for metal forming machines and for Isostatic Presses.

Outlook

We are cautiously optimistic for improved demand for heavy metal cutting and forming machine tools as a result because of the improvement in economy and the large spending on infrastructure by the government.

Internal Control system and their adequacy

The division has adequate internal controls in place.

BMTG-MTU

Business Structure Manufacturing:

Batliboi manufactures CNC machines viz. Turning Centers, Vertical Machining Center, Vertical Turning Lathes and Double Column Machining Centers. We have decided to also focus on Radial Drilling machine of large capacity in view of demand in infrastructure business.

Developments and Performance

This division was able to improve market share with improvement in quality and introduction of more new models.

For FY 23-24 major investments are being planned in the foundry and machine shop to improve production, productivity and quality

Opportunities,

The Indian economy is projected to grow at 7% in FY 23-24 which augurs well for the manufacturing sector and capital expenditure expansion for engineering industry. With the above initiatives we are hopeful of improving our performance over FY 22-23.

Threats, Risks and concerns

Delay in decision making due to government policies as well as financing available for MSME sector may have an impact on capital expenditure spending.

Internal Control system and their adequacy

The division has adequate internal controls in place.

3. Quickmill Inc.

Business Structure;

This 100% subsidiary of the company is headquartered in Peterborough, Canada and is engaged in the manufacture and sale of large size Gantry Drilling & Milling machines. It caters to the global market for the Energy, Structural Steel, Aviation, large equipment manufacturing and Job shop manufacturing sectors.

Development & Performance;

Post pandemic and resumption of travel had positive impact on sales.

Opportunities, threats & Outlook

Barring any further disruptions from any further waves of the Pandemic and any further impact to the economy due to Russia Ukraine conflict, the company expects to improve its performance as demand for capital goods has improved.

For Financial Year 2023-24 forecast for North America (which is the Companys main market) is positive with active projects for both drilling and milling. Key sectors include heat transfer, job shops and steel service centres.

Internal Control system and their adequacy

There is adequate internal controls system in place.

B. HUMAN RESOURCES / INDUSTRIAL RELATIONS

The total number of permanent employees in the Company was 327 as on 31st March, 2023.

The Company has in place Health, Safety and Environment policy for its manufacturing operations. The same is reviewed by the Board from time to time and appropriate actions are taken as directed.

Sr No Summary of Training Program (2022-2023)

1 Fixed Term Employment & Contracts Law, Procedure & Practice

2 Disciplinary Proceeding & Domestic Enquiry

3 First Aid Training

4 Positive attitude & Leadership Skill

5 Positive attitude & Leadership Skill

6 Basic Hazard & Precaution during Furnace Operation & Take preventive Action

7 Basic Electrical Safety

8 Hazard during Working at Height

9 Safe EOT Operation