chandni machines ltd share price Management discussions


INDUSTRY STRUCTURE AND DEVELOPMENTS

The global injection molding machine market size was $15.39 Bn in 2019 & is projected to reach $20.49 Bn by 2027, at a CAGR of 4.1% in forecast period. Rising investments in technological advancements for reducing production costs and scraps, thereby shortening production cycle time, are expected to drive market growth. Injection molding machines are used to produce a variety of automotive parts such as bumpers, electrical housings, exterior body panels, and dashboards. Rising R&D expenditure has resulted in the development of new technologies such as advanced hydraulic systems for large parts, electric systems for digital processing of parts for small and complex components, and hybrid systems that can work for both large and small parts, thus saving costs.

Injection molding machines (IMM) are used in a broad range of industrial, medical, dental, aerospace, firearms, and automotive applications as it is one of the most important processes in mass production. The injection molding process is reproducible and delivers similar products at a fast rate. Furthermore, IMM can produce engineering components and small disposable consumer goods with high precision.

Manufacturers focus on producing IMM, which provides flexibility in production, has low maintenance, and is highly efficient. New injection molding processes such as gas-assisted injection molding, foam injection molding, co-injection molding, and multiple component injection molding are creating a high demand for injection-molded material.

Factors such as rapid population growth, rising industrialization, and technological advancements have augmented the demand for automotive components in emerging markets. The adoption of IMM in various applications such as interior and exterior trim components, electronic subassemblies, and under-hood applications is expected to have a positive impact on market growth.

OPPORTUNITY AND THREAT

All-electric injection molding machine has production efficiency, short injection times due to dynamic servo-motors, greater repeatability, reduced noise, and best acceleration performance. Due to the high technology of all-electric machines, the investment costs are high. Another disadvantage is the extraordinary maintenance in case of waste. In case of motor failure, the entire system must be changed, which entails significantly high maintenance costs.

There is a growing demand for large tonnage injection molding machines which are used for making large molded parts for automotive, appliances, and industrial applications. Earlier, due to plant infrastructure expenses, the demand for injection molding machines was not beyond the 400 tons range with 500 presses being the maximum limit. Over the years, the demand has changed. There is a great demand for large parts. The ability of machinery manufacturers to build a large energy-efficient machine that offers fast cycle time has increased. According to the Plastics Industry Association, the shipment of large machines has increased more than small machines. Large injection molding machines give companies good business opportunities in various markets, including sports, agriculture, and automotive.

OUTLOOK

Industries have been using injection molding machines for the past several years for manufacturing products that are made of plastic, metal, rubber, and other materials. These machines are primarily used in manufacturing small and daily-use products. They are manufactured in various sizes with innovative customizations. Moreover, such machines can be operated by multiple power sources, such as electrically and hydraulically.

Factors such as the increasing globalization and the demand for reliable and low-cost productsare expected to boost this machine market revenue in the forecasted period. Furthermore, the adoption of advanced automated machines with low-cost offerings is the major trend in this market.

RISKS AND CONCERN

The coronavirus pandemic has wreaked havoc in many industries around the world. Immediate shutdowns of manufacturing plants have brought the economies of both developed and developing countries to a standstill. Moreover, the reduction in the labor workforce in the manufacturing sector has led to a decrease in the production rates, which is impacting the market growth.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Organization implements to provide direction, increase efficiency and strengthen adherence to policies. Employees discharge their assigned responsibilities to increase efficiency in the execution of work. Financial Statement provide correct and reliable information maintaining proper accounts.

DISCUSSION ON FINANCIAL PERFORMANCE

1. Share Capital: As on March 31, 2021, the paid-up share capital of the Company stood at Rs. 3,22,74,330/- consisting of 32,27,433 equity shares of Rs. 10/- each.

2. Reserves and Surplus: During the year, the total reserves and surplus of the Company is Rs. 1,92,30,753/- as compared to Rs. 1,88,87,756/- in the year 2019-2020.

3. Results: The profit before tax increased to INR 4,98,916/- as in the year 2020-2021 to INR 3,67,867/- in the year 2019-2020. The Profit for the period increased to INR 3,42,996 /- as in the year 2020-2021 to INR 1,47,499/- in the year 2019 2020.

HUMAN RESOURCE:

Human Resources Development, in all its aspects like training in safety and social values is under constant focus of the management. Relations between the management & the employees at all levels remained healthy & cordial throughout the year. The Management and the employees are dedicated to achieve the corporate objectives and the targets set before the company.

KEY FINANCIAL RATIO
PARTICULARS 2020-2021 2019-2020
Debtors turnover ratio 1.96 4.89
Interest Coverage Ratio 2.22 7.78
Current Ratio 1.06 1.15
Debt-Equity Ratio 0 0.16
Operating Profit (%) 0.12% 0.08%
Net Profit (%) 0.08% 0.03%
Return on Net Worth 0.66% 0.29%

CAUTIONARY STATEMENT:

Some of the statements made above are stated as required by applicable regulations. While they are based on the data available and the bonafide judgment of the management, the actual results may be affected by various factors, which may be different from what your management envisages in terms of future performance & outlook.