GLOBAL ECONOMIC REVIEW:
Countries around the world are facing multiple overlapping challenges, which are
hindering even reversing progress toward their development goals. Many countries are still
grappling with the health, economic, and social impacts of the COVID-19 pandemic; and
vaccination rates remain low in the poorest countries. Already high inflation has been
exacerbated by the Russian invasion of Ukraine, making food, energy, and other necessities
more expensive, with much of the burden falling on the poorest and most vulnerable people.
Many countries also face daunting debt vulnerabilities, straining their resources to
combat economic and social challenges. Climate change continues to pose long-term risks,
as natural disasters and extreme weather affect everything from agriculture to
infrastructure. And growing fragility and conflict around the world are deepening food
insecurity, forcing millions of people to flee their homes, and compounding the downturn
in growth prospects from two years of the pandemic.
(Source: World Bank)
INDIAN ECONOMIC REVIEW:
Strong economic growth in the first quarter of FY 2022-23 helped India overcome the UK
to become the fifth-largest economy after it recovered from repeated waves of COVID-19
pandemic shock. Real GDP in the first quarter of 2022 23 is currently about 4% higher than
its corresponding 2019-20, indicating a strong start for Indias recovery from the
pandemic. Given the release of pent-up demand and the widespread vaccination coverage, the
contact-intensive services sector will probably be the main driver of development in 2022
2023. Rising employment and substantially increasing private consumption, supported by
rising consumer sentiment, will support GDP growth in the coming months.
Future capital spending of the government in the economy is expected to be supported by
factors such as tax buoyancy, the streamlined tax system with low rates, a thorough
assessment and rationalisation of the tariff structure, and the digitization of tax
filing. In the medium run, increased capital spending on infrastructure and asset-building
projects is set to increase growth multipliers, and with the revival in monsoon and the
Kharif sowing, agriculture is also picking up momentum. The contact-based services sector
has largely demonstrated promise to boost growth by unleashing the pent-up demand over the
period of April-September 2022. The sectors success is being captured by a number of HFIs
(High-Frequency Indicators) that are performing well, indicating the beginnings of a
comeback.
India has emerged as the fastest-growing major economy in the world and is expected to
be one of the top three economic powers in the world over the next 10-15 years, backed by
its robust democracy and strong partnerships.
(Source: World Bank)
Indian economic reforms and recovery:
In the second quarter of FY 2022-23, the growth momentum of the first quarter was
sustained, and high-frequency indicators (HFIs) performed well in July and August of 2022.
Indias comparatively strong position in the external sector reflects the countrys
generally positive outlook for economic growth and rising employment rates. India ranked
fifth in foreign direct investment inflows among the developed and developing nations
listed for the first quarter of 2022.
Indias economic story during the first half of the current financial year highlighted
the unwavering support the government gave to its capital expenditure, which, in FY 2022
23 (until August 2022), stood 46.8% higher than the same period last year. The ratio of
revenue expenditure to capital outlay decreased from 6.4 in the previous year to 4.5 in
the current year, signaling a clear change in favour of higher-quality spending. Stronger
revenue generation as a result of improved tax compliance, increased profitability of the
company, and increasing economic activity also contributed to rising capital spending
levels.
Despite the continued global slowdown, Indias exports climbed at the second highest
rate. With a reduction in port congestion, supply networks are being restored. The CPI-C
and WPI inflation reduction from April 2022 already reflects the impact. In August 2022,
CPI-C inflation was 7.0%, down from 7.8% in April 2022. Similarly, WPI inflation has
decreased from 15.4% in April 2022 to 12.4% in August 2022. With a proactive set of
administrative actions by the government, flexible monetary policy, and a softening of
global commodity prices and supply-chain bottlenecks, inflationary pressures in India look
to be on the decline overall.
(Source: World Bank)
OUTLOOK:
Indian economy underwent wide-ranging structural and governance reforms that
strengthened the economys fundamentals by enhancing its overall efficiency during
2014-2022. With an underlying emphasis on improving the ease of living and doing business,
the reforms after 2014 were based on the broad principles of creating public goods,
adopting trust-based governance, co-partnering with the private sector for development,
and improving agricultural productivity. The period of 2014-2022 also witnessed balance
sheet stress caused by the credit boom in the previous years and one-off global shocks,
that adversely impacted the key macroeconomic variables such as credit growth, capital
formation, and hence economic growth during this period. This situation is analogous to
the period 1998-2002 when transformative reforms undertaken by the government had lagged
growth returns due to temporary shocks in the economy.
Once these shocks faded, the structural reforms paid growth dividends from 2003.
Similarly, the Indian economy is well placed to grow faster in the coming decade once the
global shocks of the pandemic and the spike in commodity prices in 2022 fade away. With
improved and healthier balance sheets of the banking, non-banking and corporate sectors, a
fresh credit cycle has already begun, evident from the double-digit growth in bank credit
over the past months. Indian economy has also started benefiting from the efficiency gains
resulting from greater formalisation, higher financial inclusion, and economic
opportunities created by digital technology-based economic reforms. Indias growth outlook
seems better than in the pre-pandemic years and the Indian economy is prepared to grow at
its potential in the medium term.
INDIAN FURNITURE AND LAMINATE MARKET:
The Decorative Laminates Market is growing at a CAGR of >3% over the next 5 years.
The value of Indias exported veneered or laminated plywood amounted to about five billion
Indian rupees in the fiscal year 2022. This was the largest share of exports within the
wood industry in the country that year. Indian total wood industry exports were valued at
14 billion Indian rupees that year. Asia-Pacific region is expected to dominate the global
decorative laminates market and is also forecasted to be the fastest-growing region over
the forecast period owing to the increasing consumption from countries such as China,
India, and Japan. Increasing construction activities in India, among other countries are
expected to boost the demand for furniture, wall panels, cabinets, etc. which further is
expected to drive the demand for decorative laminates in the coming years.
According to Invest India, the Indian construction industry is expected to grow at a
CAGR of 15.7% from 2017-2022 and is projected to value USD 738.5 billion in 2022.
Additionally, initiatives, such as ‘Housing for All and ‘Smart City Mission,
is expected to drive the growth of the construction sector in India. Thus growing
construction activities is expected to boost the demand for furniture in coming years.
(Source: Statista, Mordor Intelligence)
GROWTH DRIVERS:
The growing middle-class population, rising disposable income, and the growing number
of urban homes all contribute to the expansion of the Indian furniture market.
The rising desire for modular and state-of-the-art furniture among the people living in
urban areas, growing urbanization in Indian states, and rising need for durable and hybrid
seating furniture are all driving the growth of the Indian furniture industry.
Furthermore, Indias growing trend of online and mobile shopping is expected to boost
demand for furniture via online channels.
The growth of the Indian furniture market is also driven by the tourism and hospitality
industry and the corporate sector. The increasing number of hotels and business offices
further spur the demand for furniture in the country.
The furniture industry bounced back with the rise in work or study from furniture in
later half of 2020. Pandemic has also resulted need for the privacy and personalized space
within the house that were required for the work from home or study from home, which
resulted in increase in demand for WFH furniture.
OPPORTUNITIES:
The rising popularity of ready-to-assemble floorings, furniture, and cabinets has also
encouraged consumers to shift toward modern home furnishing designs
The rapid development of commercial infrastructure in India has increased the demand
for decorative interior products
The elevating living standards and the increasing per capita expenditure of consumers
THREATS:
A high goods and services tax (GST).
A spurt in crude oil prices which is further used in the plywood industry to join
thinner sheets
Increase in prices of raw materials and dollar combined impact
Lack of technology may affect production which in turn may affect supply.
RISKS AND CONCERNS:
A well-defined risk management mechanism covering the risk mapping and trend analysis,
risk exposure, potential impact and risk mitigation process is in place. The objective of
the mechanism is to minimize the impact of risks identified and taking advance actions to
mitigate it. The mechanism works on the principles of probability of occurrence and
impact, if triggered. A detailed exercise is being carried out to identify, evaluate,
monitor and manage both business and non-business risks.
SEGMENT WISE OR PRODUCT-WISE PERFORMANCE:
The Companys operation predominantly comprise of only one segment. In view of the
same, separate segmental information is not required to be disclosed as per the
requirement of Indian Accounting Standard 108 Operating Segment.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
The net revenue from operations decreased to 1,097.22 lakhs as against 2,141.30 lakhs
in the previous year showing a downward trend of 48.76% due to decrease in domestic sales
of Laminates and Door.
The loss before Tax for the current year is 498.24 lakhs as against the loss before tax
of 2,619.54 lakhs in the previous year. The profit after tax stood at 2,146.70 lakhs as
compared to loss after tax of previous year of 2,020.31 lakhs.
FUTURE OUTLOOK:
The Company has repaid entire dues to Bank and focused on the reduction of
administrative cost. Moreover, Company has shifted its manufacturing plant at new premises
on rent basis located in Gandhinagar. The Company will continue manufacturing activity of
doors Division and trading of laminates. With the reduction in the cost and focusing on
manufacturing doors and trading of laminates, the Company expect better financial result
in the upcoming years.
KEY FINANCIAL RATIOS:
Details of key financial ratios of the Company, changes therein as compared to previous
financial year along with explanations for those ratios where change is 25% or more are as
under:
Key Ratios |
Units |
F.Y. 2022-23 |
F.Y. 2021-22 |
Explanations |
Debtor Turnover |
Times |
2.01 |
2.86 |
Due to decrease in the trade receivables and revenue from operations |
Inventory Turnover |
Times |
2.08 |
1.11 |
There is the decrease in the average inventory so that ratio is on
higher side |
Interest Coverage Ratio |
Times |
Negative |
Negative |
Due to loss incurred by the Company, the Ratio is negative. |
Current Ratio |
Times |
1.00 |
0.42 |
Due to substantial decrease in the current assets and liabilities. |
| Debt Equity Ratio |
Times |
(2.59) |
(1.96) |
Due to substantial decrease in the borrowings |
Operating Profit Margin |
% |
(43.72%) |
(99.83%) |
There has been decrease in the sales & operations of the Company
during the current year, leading to decrease in Profit. |
Net Profit Margin Return on Net Worth |
% % |
195.65% Negative |
(94.35%) Negative |
Due to substantial increase in the profit due to sale Business assets
and Settlement of dues with Lenders Negative |
HUMAN RESOURCE:
Equipping Bloom with an engaged and productive workforce is essential to our success.
We look for commitment, skills and innovative approach in people. In assessing capability,
we consider technical skills and knowledge that have been acquired through experience and
practice, along with mental processing ability, social process skills and their
application. We continue to invest in developing a pipeline of future talent and nurture
them. As part of this process, we provide development and training opportunities to our
workforce, which motivates and encourages them to grow in their work. As on March 31, 2023
the company has 8 employees at its manufacturing plants and administrative office. The
Company has been maintaining cordial and healthy Industrial Relations, which has helped to
a great extent in achieving the upper growth.
CAUTIONARY STATEMENT:
This statement made in this section describes the Companys objectives, projections,
expectation and estimations which may be ‘forward-looking statements within the
meaning of applicable securities laws and regulations.
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