camex ltd Management discussions

(I) INDUSTRY STRUCTURE AND DEVELOPMENTS

The global dyes market size was valued at $33.02 billion in 2021 and is predicted to grow at a compound annual expansion rate based on revenue of 6.0% from 2021 to 2026. World demand for dyes and organic pigments is forecast to increase 3.9% per year since 2013, in line with real (inflation-adjusted) gains in manufacturing activity. Following trends seen over the past decade, the Asia/pacific region will experience the strongest growth and increase its share of the global dye and organic pigment market. Growth in dye consumption will trail increase in organic pigment demand, although dyes will continue to represent the lions share of the overall market both in volume and value.

Rise in production of textiles to meet the increase in demand for consumers is expected to drive the growth of the market. Increase in urbanization, product innovation, rise in industrialization, and exponential growth of the online fashion sector is further expected to accelerate the growth of the market.

The market was negatively impacted by COVID-19. Owing to pandemic scenario, various countries went into lockdown, which led to supply chain disruptions and work stoppages. This negatively affected the demand of various industries like paints and coatings, textiles, and others. However, the conditions are expected to recover, thereby restoring the growth trajectory of the market studied during the forecast period.

The exports, of not just dyes, but also of other chemicals, gradually picked up as the year progressed and they showed significant improvement in February and March 2021. Hence, the overall exports of different chemicals from India were down only by 2.6% to $ 17.6 billion in FY 2021 from $ 18.1 billion in previous year. The reduction was largely due to the drop in export of dyes and organic chemicals. And now with the onset of liberalization and globalization, the Industry is on a major expansion spree. The industry today is into manufacturing wide range of goods including fine and specialty chemicals, drugs and pharmaceuticals, dyes and pigments, agrochemicals and fertilizers, pesticides, plastics and petrochemicals etc. However, Indian chemical industry is yet to make its presence felt in a big way in the international markets.

Wide distribution channel in the market is achieved through both physical retail stores and online retailing. Availability of the product online has increased the consumer base for the companies and also witnesses higher reach which is anticipated to drive product demand.

(II) OPPORTUNITIES AND THREATS

The textile industry is witnessing growth due to several factors such as growing population, increasing disposable income and changing consumer trends. Textile industry is one of the major applications for dyes and is expected to provide a positive scope for the product demand over the forecast period.

Moreover, the production cost of Chinese chemical companies has also gone up due to increase in pollution control norms and this has narrowed down the cost differential between Indian and Chinese companies, to a certain extent. Thus, India can become another source of a Specialty chemical manufacturing hub.

The Dyes and Pigments market report provides a detailed analysis of global market size, regional and country-level market size, segmentation market growth, market share, competitive Landscape, sales analysis, impact of domestic and global market players, value chain optimization, trade regulations, recent developments, opportunities analysis, strategic market growth analysis, product launches, area marketplace expanding, and technological innovations. The dyes industry in India is expected to witness a steady growth in the coming years due to environmental crackdowns in China, resulting in a shutdown of several domestic dye companies. India is better placed due to the availability of the ecosystem, feedstock, technology, and compliance required for the industry. Thus, the consumer base of China is likely to shift to India due to these reasons in the coming years.

Exports of dyes and pigments are expected to improve on account of rising demand from the developed countries, as their local units shut down due to environmental issues. However, domestic environmental issues and regulations would restrict the supply growth from the SMEs. Also, competition from China in the export market would impact the smaller players. As a result, demand would be increasingly met by large players as they can install effluent systems which are required to comply with regulations.

The major dye and dye intermediates importing countries such Turkey, Indonesia, Bangladesh and Italy had seen lockdowns and restrictions following the pandemic, which ultimately pulled down the exports down.

(III) SEGMENT WISE OR PRODUCT-WISE PERFORMANCE:

The company is engaged in a multi segment as Dyes and Chemicals, Metals Fiber Glass and Others. And thus, separate segment wise performance details given in the financial statement. As for the product wise performance, the board wishes to state that the Company earned to 6363.59 Lakhs from Dyes and Chemicals as compared to last years sales of 8674.47 Lakhs for the financial year ended on March 31, 2023. Further, the company started the business of Fiber Glass and earned the revenue of 1642.23 Lakhs as at March 31, 2023.

(IV) OUTLOOK OF THE INDUSTRY

Rising consumer spending will drive increased demand for organic colorants in textiles and plastics, while strong growth in global construction activity will boost demand in paints and coatings. Increase in value demand will reflect the growing importance of expensive, higher value dyes and pigments that meet increasingly stringent performance standards and preferences for more environmentally friendly products. The fastest growth in dye and organic pigment demand will be in paints and coatings applications, driven primarily by strong advances in construction expenditures in North America and continued growth in the Asia/Pacific region. While the outlook for many organic colorant applications remains healthy, more moderate advances in printing inks, due principally to the growing publication of information in electronic form, will restrain overall dye and pigment demand. Opportunities will exist, though, for dyes and organic pigments that can be used in digital inks added the release.

Due to the rising demand for organic pigments, they are the dominant type of pigments being produced in India, accounting for 58% of the total pigment production in India. The global market for colorants has seen strong expansion due to escalated calls from end user companies such as food, textiles, printing, inks, paintings and coatings. Growing economics China, India, Brazil and Indonesia are likely to play significant role in dyes consumption in the years to come.

Delayed shipments from China and a spike in raw material prices are threatening the dyes and dyestuff industry in Gujarat. Disruption in raw material supply from China could lead to 25% of dyestuff making units in the state closing, industry players fear. Gujarat is home to some 1,500 dyes and dyestuff manufacturing units. Local dyestuff units are heavily dependent on imports of several raw materials, including chemicals and intermediates, from China and supply has been hit due to shipments being stuck owing to the coronavirus scare.

(V) RISKS AND AREAS OF CONCERN

The emergence of COVID-19 has brought the world to a standstill. We understand that this health crisis has brought an unprecedented impact on businesses across industries. However, this too shall pass. Rising support from governments and several companies can help in the fight against this highly contagious disease. Some industries are struggling and some are thriving. Overall, almost every sector is anticipated to be impacted by the pandemic.

We are making continuous efforts to help your business sustain and grow during COVID-19 pandemics. Based on our experience and expertise, we will offer you an impact analysis of coronavirus outbreak across industries to help you prepare for the future.

India and Indonesia are slowly taking the lead in dye manufacturing due to the availability of raw materials and also immediate organic chemicals. The dyes market is a booming activity driven mainly by call from end user companies such as textiles. Dyes and pigments are prepared from various chemicals, which are primarily derived from basic petrochemicals (benzene, toluene, xylene and naphthalene). Thus, input costs are volatile given that they are crude oil derivatives. Moreover, depreciation in the rupee as compared to US$ may have some effect on the Companys business.

(VI) INTERNAL CONTROL SYSTEMS AND ADEQUACY

Internal Control Systems of the Company are commensurate with the nature of its business and size and complexity of its operations. These are routinely tested, certified and upgraded whenever required by the Statutory as well as the Internal Auditors covering all key areas of business. Significant audit observations and follow up actions and recommendations there on are reported to the higher Management and Audit Committee for their review.

(VII) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year, your Company earned to 13380.45 Lakhs as compared to last years Revenue of 16343.38 Lakhs and the Company earned profit of 1966.22 Lakhs for the year as compared to profit of 95.87 Lakhs in the previous year. Your directors are hopeful of getting better results in the current financial year, however depreciation in the rupee as compared to US$ may have some effect on the Companys business.

(VIII) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company continued with its drive to institutionalise and upgrade its HR processes, to help build a more robust workforce capable of managing dynamic and growing business needs. In particular, it focused on improving its processes related to Integrated Development, Performance Management and Succession Planning.

(IX) 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, INCLUDING:

Particulars	FY ended March 31, 2023	FY ended March 31, 2022	Changes between Current FY & Previous FY	Explanation
Debtors Turnover	4.37	4.69	-7%	NA
Inventory Turnover	15.73	14.62	8%	NA
Interest Coverage Ratio	1.86	5.58	-33.33%	The reason is the increase Interest Expense and Higher Earnings Before Tax and Depreciation.
Current Ratio	3.46	3.35	-2%	NA
Operating Profit Margin (%)	1.66%	2.45%	0.66%	The reason is decrease in the turnover of the Company.
Net Profit Margin (%)	0.46%	2.61%	-82%	Company has booked profit (exceptional item) of 320.22 Lacs on sales of land & building, plant and machinery and other assets which resulted into increase in Net Profit after Tax and Improvement in Net profit ratio.
Return on Net Worth (%)	1.6%	12.16%	-86%	Company has booked profit of 320.22 Lacs on sales of land & building, plant and machinery and other assets which resulted into increase in Net Profit after Tax and Improvement in Return on Equity (ROE).
Debt - Equity	0.13	0.23	-46%	Due to repayment of short/long term working capital loan the debt Equity Ratio has improved

(x) DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Please refer the details given in above point no. (IX)

(XI) DISCLOSURE OF ACCOUNTING TREATMENT:

N.A.

(XII) CAUTIONARY STATEMENT

Estimates and expectations stated in this Management Discussion and Analysis may be "forward-looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and international markets, changes in the Government regulations, tax laws, other statutes and other incidental factors.

For and on behalf of the Board of Directors

Date: July 11, 2023	Chandraprakash Chopra Chairman & Managing Director
Place: Ahmedabad	DIN: 00375421