Today's Top Gainer
Note:Top Gainer - Nifty 50 More
Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements could thus differ materially from those projects in any such forward- looking statements.The Company assumes no responsibility to Company amends, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.
Chandra Prabhu International Ltd. is a well known name in the trading of Coal and Synthetic Rubber for last many years. Over the years Chandra Prabhu International Ltd. has built a formidable reputation of being a completely professionally managed Company where customer satisfaction is of paramount consideration.
The Industry: opportunities & Threats.
During the Fiscal year 2017-18, The Indian Economy GDP aggregate groth rate is 6.7 percent in the current fiscal as against 7.2 percent in the previous businesses are still taking time to adjust in the new tax regime, which would weigh on growth rates for the financial year. However, the moot point is that economic growth saw disruptions due to demonetisation and implementation of the GST.
While the impact of demonetisation has faded, experts believe that some of the GST effects are still lingering such as on exporters who have been struggling to get refunds.Major risks to the economy may come from oil prices and growing tendency of protectionism around the world, triggered by USs so-called reciprocal taxes. However, domestic factors, including from adjustments to the GST, would play a greater role.
Major external risks include oil price shocks, tax rate competitiveness, and growing barriers to trade. However, the Indian economy remains predominantly a domestically-driven one, so the major downside risks will be domestic in nature, such as continuing disruptions from the implementation of the GST the outlook for domestic macroeconomic parameters is generally optimistic.
The Company being trading Company, the activities of the Company can be broadly divided into three business segments viz Coal, Agro Food Products and Synthetic Rubbers.
In Indias energy sector, coal accounts for the majority of primary commercial energy supply. Coal will continue to be a dominant commercial fuel two decades from now and beyond, despite our nuclear energy programme, development of natural gas supplies, increased hydropower generation, and emphasis on renewables.
The Indian coal industry aspires to reach the 1.5 billion tonne (BT) mark by FY 2020. In forthcoming years, the industry will naturally need to focus on building on the success, and be on track for reaching the FY 2020 goal. One of the primary goals of the Government of India is to ensure that it is able to meet the countrys power generation needs. Another aim is to lower the countrys reliance on coal imports by boosting the coal production quickly.
The government expects that by 2017-19, it will not have to import coal, except to feed power plants located along the coast. Coal imports have shrunk by around 9% this year, according to the government, which is a positive trend. The success of coal block auctions carried out by the new government has proved that its decision to conduct a fair and transparent bidding for coal mines has benefited the country in a big way. Indias investment in new coal-fired generation capacity will support an increase in coal use. India has plans to almost double its production to one billion tonnes by 2020 to meet its growing requirements.
Despite of the fact that significant fall in coal business of the company during the year under review, the company relying its core strength in the field of coal and the fact that growing industry demand mainly by power, Steel & Cement sector and the increasing government support that will boost the coal production in the country and anticipation that the demand for thermal coal and coking coal by power, steel & cement sectors, respectively, will gain momentum in near future apart from small consumers of the coal like brick kiln etc., will regain its business momentum in coal.
Natural rubber and synthetic rubber are both used in tyre manufacturing. The Company deals mainly in synthetic rubber. The much faster growth in Synthetic rubber consumption in the general goods sector is largely attributed to the increased domestic availability coupled with the lower prices relative to Natural Rubber.
India forms a booming market with a huge base of 720 million consumers across 627,000 villages. India is the fourth largest tyre market in the world. At 7.64 % growth, India is the fastest growing passenger car market.
Various agencies have projected a GDP growth of 8-9% for India till 2020. The increase in GDP will be driven by the growth in industrial sector. With Indias per capita GDP quadrupling by 2020, Indians will consume five times more cars and three times more crude oil.
The projected growth of Indian economy, growth in road infrastructure, rising per capita income, competitive pricing, new model launches, low penetration of cars in India etc are the key drivers of growth of the Indian automobile industry. However, certain factors are hampering the industrys growth such as high inflation, rising interest rates, rising fuel prices, lack of parking space, lack of proper roads etc.
The Indian Rubber Industry is broadly divided in two major sectors - tyre and non-tyre sector. Indian tyre industry is an integral part of the auto sector and its fortunes are interdependent on those of the automotive sector. India becomes not only a regional base for small car production, but also an exports hub to other emerging markets. The automotive sector has been contributing its share. The Indian tyre industry has been witnessing tremendous growth for the past few years on account of growth in automobiles demand, especially in passenger vehicles and two-wheeler segments. The automotive production data shows an uptrend during the year and the growth continued on account of growth in two wheelers production.
Companys outlook for Rubber
The companys rubber supply is mainly to footwear industry and it shall endeavour to extend its supplies to tyre industry also. The non-tyre sector comprises the medium scale, small scale and tiny units. The performance of your Company in future prospects shall be dependent on the major players of the industries using coal and synthetic rubber as raw material.
Challenges Ahead :
However, the rubber industry is faced with many challenges. Increased imports due to inverted duty structure are harming the industry which needs to be addressed. More focus is needed from policy makers to help the industry tide over the crisis caused by free import of rubber products. High interest costs are leading to slow shift in high- technology equipment.
Rising crude oil prices, rupee depreciation, fresh trade tension between the US and China, the electoral setbacks received by the BJP in Karnataka and UP etc contributed to a 2% to 13% fall in the stock prices of Indian tyre majors
Following the downtrend on the bourses, the stocks of most Indian tyre companies reported a decline in the period of May 9, 2018 to June 18, 2018.
Focus on growing domestic market could lead to loss of opportunity in global rubber trade.
Most rubber consuming nations have increased their rate of value addition and India needs to follow suit if it is not to be left out in global competition.
Agro Food Products
The Company during the year has diversified its operations and has entered into the business of trading of Agro Food Product. During the year under review the company has mainly focused on import of Pulses, spices, course cereals chick peas and its supplies in domestic market and International market.It is generally the policy of the Government that import duties should be low for those sensitive essential products where there is a large domestic shortfall in production. The Company is building up its network to play a significant role in this segment.
Agriculture Development : Production Of Major Agriculture Products (in Million Tonnes) as per Economic Outlook Report.
|Particulars||Estimated Production 201718 (mn tonnes)||Production in 201617 (mn tonnes)||Average Production in last 5 years||% yoy increase / (decrease)|
Source: Press Information Bureau, Government of India
Business Outlook and Overview:
Apart from trading of coal and rubber and with the companys entry into agro food business in the previous year, the management of your company is confident to maintain the growth momentum and overall improvement, by increasing its network and source of supplies. The company shall endeavor to revive its coal business in future to exploit the opportunities in the power Sector, followed by steel and cement sectors are very promising.
Further, keeping in view the growth potential, the company is also exploring to canalize with the tyre manufactures, apart from footwear, cycle tyres, Rubber hoses, cots and aprons, Belts and beltings and Sheeting.
Rubber prices are profoundly influenced by market factors such as season, growth in industrial production: automobile industry, the ratios of utilization of domestic production and imported rubber by tyre manufacturers, Government policies. These include subsidies, restrictions on ports etc., international rubber price movements, have a slow influence and lastly stockiest and speculators also play a significant role in influencing prices.
In light of Indias large population, rising income levels and eating habits, increasing per capita consumption, leading to higher spending and resulting in rising consumption of food products, including spices, beans, and other seasonal crops. The Company is optimistic about increase in demand for Agro based product and expects to improve its performance. Agro Food products are very price sensitive and competitive and also depend upon the governmental policies.
|For and on behalf of the board of directors|
|Chandra Prabhu International Limited|
|Akash Jain||Prakash Goyal|
|Date : August 29, 2018||Joint Managing Director||Director|
|Place : New Delhi||DIN: 00049303||DIN: 02598736|