bharat textiles & proofing industries ltd share price Management discussions


1. Industry Structure and Developments:

Indian Economy

Indias textiles sector is one of the oldest industries in the Indian economy, dating back to several centuries. The fundamental strength of the textile industry in India is its strong production base of a wide range of fibre/yarns from natural fibres like cotton, jute, silk and wool, to synthetic/man-made fibres like polyester, viscose, nylon and acrylic.

As per the International Textile Manufacturers Federation (ITMF), the Textile sector has seen weakening demand since June 2022 due to persistent global inflation and lingering possibilities of a recession. Despite the slowdown in the sector globally,the overall Indian textiles market is expected to be worth more than US$ 209 billion by 2029

The Government of India is keenly interested in promoting the Brand "Made in India" in global market. As the textile industry is the second largest sector of economy in providing employment opportunities, the Government is committed to the growth and betterment of this sector. In order to attract private equity and employee more people, the government introduced various schemes such as the Scheme for Integrated Textile Parks (SITP), Technology Upgradation Fund Scheme (TUFS) and Mega Integrated Textile Region and Apparel (MITRA) Park scheme.

The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. The organised apparel segment is expected to grow at a Compound Annual Growth Rate (CAGR) of more than 13 per cent over a 10-year period

Tarpaulin And Textiles Sector:

This sector experiences a challenging operating environment and uncertainty over demand growth and volatility in raw material prices, it is likely that the sectors outlook will turn relatively positive. Margin pressure would persist for both the cotton and synthetic textile industries, driven by rising power and wage costs and higher interest rates. The cotton industry is presently facing challenges like slow demand and a loss in margins, but a recovery is expected on account of falling cotton prices, though this could be negated by further volatility in input costs or forex movements.

The world market size for canvas tarpaulin stood at US$ 408 Million growing at a CAGR of 6.5% to reach expected market size of US$ 561.97 Million. The likely market for canvas tarpaulin in India for the year 2024-25 is Rs. 475.10 Crores.

2. Performance Review:

The Income of the Company for the year is INR 1382.36 Lakhs as against previous years of INR 962.88 Lakhs. The Companys net profit for the year ended was INR 18.81 lakhs approximately (last year profit amounts to INR. 10.52 lakhs. The Earning Per Share (EPS) for the year is Rs. 0.32.

3. Business Outlook:

Your Company expects to continue to identify prudent land acquisition opportunities even as it intends to focus on the timely completion of its projects, despite of number of risks. Your company will be facing them with full zeal and gist and will be able to overcome and withstand the risks enumerated envisaging future outlook.

4. Opportunities and Threats:

The Company is exposed to different types of risks such as credit risk, market risk (including liquidity risk and interest rate risk), operational risk and legal risk. The Company monitors credit and market risks, as well as portfolio and operational risk through the oversight of senior management personnel in each of its business segments. Legal risk is subject to the review of the Companys legal department and external advisers. The Company is exposed to specific risks in connection with the management of investments and the environment within which it operates.

The Government of Indias push to substantially increase the size of the textile industry output with focus on man-made fibres, will pave the way for larger polyester fibre consumption due to limited availability and substantially high prices of cotton, benefitting the polyester industry at large.

The Company aims to understand measure and monitor the various risks to which it is exposed and to ensure that it adheres, as far as reasonably and practically possible, to the policies and procedures established by it to mitigate these risks.

There are certain key challenges and threats that need to be actively addressed and mitigation steps to be taken as and when required. These challenges can be summarized as follows:

Increasing input material costs leading to higher cost of construction.

Increasing labor cost and shortage of skilled and technically qualified manpower.

Land prices still continue to be high.

Lack of desirable progress in development of infrastructure specifically in the areas of roads, water and sewage systems, power, etc.

Absence of industry status and institutional financing for land procurement.

Decrease in Investments in the last year.

Tax structure GST (Goods and Service Tax) make the garments expensive.

5. Internal Control Systems and Adequacy:

The Company has in place adequate internal control systems and procedures commensurate with its size and nature of business. The Internal Audit team continuously monitors the effectiveness of internal control and provides a reasonable assurance of the adequacy and effectiveness of your Companys control, governance and risk management process to the Audit Committee. It also checks the implementation of corrective actions and improvements suggested by the Audit Committee.

Internal Audit focuses on the following objectives, forming part of the Audit Plan approved by the Audit Committee:Adherence to the operating systems and manual;Performance of operational activities in an efficient and effective manner;

Compliance with the risk management process;Compliance with legislative and regulatory provisions.

The Audit Committee reviews the Audit Reports and also has discussions with the Statutory Auditors.

6. Human Resources:

Your Company continues to maintain a constructive relationship with its employees through a positive environment so as to improve productivity and efficiency. Your company also continues to invest in people process and skill development and provide them with high performance oriented environment.

7. Cautionary Statement:

The information and opinion expressed in this Report may contain certain forward-looking statements, which the management believes are true to the best of its knowledge at the time of preparation of the report. The management shall not be liable for any loss, which may arise as a result of any action taken on the basis of the information contained herein. Prior written permission of the Company may be obtained for furnishing this information to any person.

8. Conclusion :

Your Companys primary focus will be to grow volumes across markets. BTPIL will address each market depending on local conditions and consumer trends. While we recognise that the global environment is extremely challenging there are new opportunities emerging to meet consumer needs. Bharat Textiles will focus on profitable growth through a mix of brand led growth, innovation, efficient cost management and successfully scaling up new businesses.

FOR AND ON BEHALF OF THE BOARD

Sd/- Sd/-
Ajeet Kumar Bhandari Anil Bhandari
Date: 05th September 2023 DIN: 01023609 DIN: 02722372
Place: Chennai Managing Director Whole Time Director