DJS Stock & Shares Ltd Management Discussions

Overall Outlook

Indias broking industry has experienced massive growth ever since the years of the pandemic. According to reports from January 2024, 4.9 million demat accounts were opened in December of 2023 itself, with the year ending at a total tally of 139 million. This boom can be attributed to many aspects, such as an increase in overall income and a greater interest in the stock market. However, this influx of investors requires brokers to keep one very important factor in mind i.e transparency.

The evolving financial landscape demands that we as brokers ensure the well-being and interests of our clients. People and outlets have already labelled the money we handle for our clients as "A cheap and easy source of funding", a sentiment that may seem harmless but can impact client trust. Transparency is the cornerstone of any financial transaction.

Hidden charges and complex fee breakdowns can almost instantly turn away a potential client and erode existing investor confidence. SEBI has previously instructed all brokers to disclose the most important terms to investors, as a majority would not be aware of the various fees associated with the broking service.

Industry Structure and Development

Despite global challenges, the Indian stock market in 2023 exhibited resilience and growth, underpinned by strong domestic fundamentals and foreign investor confidence. The upward trend, driven by sectors like banking, auto, and real estate, along with proactive measures by the RBI and the government, indicates a positive outlook for the Indian market.

Looking ahead to 2024, these factors, combined with the anticipated socio-political stability and continued growth in corporate earnings, are likely to sustain the momentum in the Indian stock market. Investors, both domestic and foreign, may find ample opportunities in this landscape, highlighted by Indias growing economic strength and market potential

Growth Sectors: In 2023, technology, communication services, and consumer discretionary sectors experienced considerable growth, buoyed by investor optimism about possible rate reductions in early 2024.

Sector Performance: The high-growth areas like technology, telecom, and consumer discretionary have been at the forefront of the S&P 500s performance in 2023. In contrast, sectors traditionally seen as defensive, such as utilities, healthcare, and consumer staples, have not kept pace.

In response to global trends, the RBI in India also raised the repo rate by a total of 250 basis points since May 2022 to curb inflation. However, rates have been maintained steadily since July 2023. The RBI forecasts consumer inflation to be around 5.4% for the fiscal year 202324, aligning with earlier estimates. RBI Governor Shaktikanta Das has clarified that policy relaxation is not currently under consideration, asserting that managing inflation demands active intervention and cannot be automated continued supply-side measures to control food inflation are expected.

Looking ahead to 2024, these factors, combined with the anticipated socio-political stability and continued growth in corporate earnings, are likely to sustain the momentum in the Indian stock market. Investors, both domestic and foreign, may find ample opportunities in this landscape, highlighted by Indias growing economic strength and market potential.

Segment-wise/Product-wise Performance

The Company is engaged mainly in the financial services and as such there are no other reportable segment as defined by Indian Accounting Standard 108 on "Operating Segments" issued by the Institute of Chartered Accountants of India.

Outlook and Indian Economic Review

‘Indian Economy - Review, This is not the Economic Survey of India prepared by the Department of Economic Affairs. That will come before the full budget after the general elections. This review takes stock of the state of the Indian economy and its journey and offers a brief sketch of the outlook for the economy. It provides an overview of the past, present and future of the Indian economy and takes a more detailed look at the governments policies and progress on various parameters in different sectors. It now appears very likely that the Indian economy will achieve a growth rate at or above 7% for FY24, and some predict it will achieve another year of 7% real growth in FY25 as well. If the prognosis for FY25 turns out to be right, that will mark the fourth-year post-pandemic that the Indian economy will have grown at or over 7 per cent. That would be an impressive achievement, testifying to the resilience and potential of the Indian economy. It augurs well for the future.

The global economy is struggling to maintain its recovery post-Covid because successive shocks have buffeted it. Some of them, such as supply chain disruptions, have returned in 2024. If they persist, they will impact trade flows, transportation costs, economic output and inflation worldwide. India will not be exempt from it, but having faced and seen off COVID and the energy and commodity price shocks of 2022, India is quietly confident of weathering the emerging disturbances.

The Indian economy is expected to grow in the next decade and it is considered the best time to invest in India. When it comes to picking stocks to invest in, the first thing most investors think of is stocks that are trending which will give them multifold returns. However, picking trending stocks will not give benefits in the long run. So, investors need to change their game of investing by investing in the best sector stocks that are likely to grow in the near future.

Option for picking stocks for growing sectors to make good profits in the long run. Few sectors such as FMCG, mining, and health care sectors are never going out of demand.

- Investors should invest in the best sector to invest in 2024 to earn maximum benefits from the stock market.

- Opt for picking sector-specific stocks that have good fundamentals.

- The Indian economy is likely to grow in the next decade. So, it is a good time to invest in the best sector.

In 2023-24, as per current estimates, it is estimated to have grown 7.3 per cent on top of the 9.1 per cent (FY22) and 7.2 per cent (FY23) in the previous two years, and the economy is generating jobs. This impressive post- pandemic recovery has seen the urban unemployment rate decline to 6.6 per cent.

Internal Control System

We have an adequate system of internal controls in place. We have documented policies and procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance regarding maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, and protecting assets from unauthorized use or losses, compliances with regulations. We have continued our efforts to align all our processes and controls with global best practices. Some significant features of the internal control of systems are: The Audit Committee of the Board of Directors, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards as well as reasons for changes in accounting policies and practices.

The Board takes responsibility for the overall process of risk management throughout the organization. Through an Enterprise Risk Management program, our business units and corporate functions address risks through an institutionalized approach aligned to our objectives. This is facilitated by internal audit. The Business risk is managed through cross functional involvement and communication across businesses. The results of the risk assessment are presented to the senior management. During FY24, we assessed the effectiveness of the Internal Control over Financial Reporting and has determined that our Internal Control over Financial Reporting as at March 31, 2024, is effective.

Financial Performance w.r.t. Operational Performance

During the year under review, the Company has earned Total Revenue of Rs. 22,604.86 hundreds in comparison to Rs. 31,376.91 hundreds during the previous financial year. On the other hand, the Total Expenses were Rs. 25,226.26 hundreds as compared to Rs. 24,505.19 hundreds during the previous year. The loss for the current year was Rs. 2,633.28 hundreds in comparison with loss of Rs. 17,202.51 hundreds during the previous year. The Company is trying hard to grab the market opportunities and make it into a profit-making Company.

Safety, Health and Environment

Y our Company as a matter of policy gives greater importance to safety, health and environment and also ensures compliance with applicable legislative requirements.

Human Resources

Our people are our best assets. Their caliber and commitment are our inherent strength. With the singular objective of always being the employer of choice in the Indian industry, we are encouraging our employees to discover and realize their true potential. Acquiring diverse experiences, accomplishing challenging tasks and continually learning and upskilling is enabling them to deliver their best. By identifying, developing and nurturing quality talent at every stage of the employee lifecycle, we are empowering them to become future ready and build rewarding careers. Keeping employee well-being foremost, we have embraced the post- pandemic way of life and work. By institutionalizing hybrid mode of working, digitizing processes, refreshing our culture, we are collectively fostering new ways of working. Future ready trails of agility, digital mindset and customer centricity are being consciously imbibed, both in thought and action, at every level across the organization. Richer collaborations and stronger teamwork have accelerated our pursuit of excellence.

Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes in Key sector-specific financial ratios.

1 The current ratio has improved as a result of more decline in current liabilities.

2 The net profit margin ratio has gone down due to decrease in income from operation of the company.

3 Return on Net-worth (%) gone down due to decrease in income from operation of the company.

Cautionary Statement

Statements in the Report describing our objective, projections, estimates and expectations may be "forward-looking statements" 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 our operations include, among others, economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets, in which we operate, in addition to changes in government regulations, tax laws and other statutes and incidental factors.