dolat investments ltd Management discussions

Macro-Economic Indicators

The Russian invasion of Ukraine started on February 2022. The world thereafter had to deal with disruptions in food and energy supplies of a magnitude which was not experienced in recent memory. The impact on India remained marginal, mainly on account of the astute foreign policies and efficient food grain distribution by the government. Consequently, in India, large & small companies and the services sector has not been substantially negatively impacted. Even so, the year FY 2022-23 recorded a lower earnings growth for the Nifty 50 companies than what was estimated by analysts at the beginning of the financial year. Indian markets in FY 2022-23 had flat closing Major indices.

Companys Financial Review

On a consolidated basis, the revenue for FY 2023 was 2,413.37 million as compared to 2,928.04 Million in the previous year.

On a standalone basis, the revenue for FY 2023 was 1,537.98 Million as compared to 2,317.64 Million in the previous year.

Other significant financial parameters of the Company are given below:

Profit before finance cost and tax

The profit before finance cost and tax for Consolidated aggregated 1,891.34 Million in FY 2022-23 as against 2,556.95 Million in Previous year.

The profit before finance cost and tax for standalone aggregated 1,685.41 Million in FY 2022-23 as against 2,396.15 Million in previous year.

Profit before tax (PBT)

Profit before tax for Consolidated amounts to 1,625.51 Million in FY2022-22 as against 2,304.44 Million in previous year.

Profit before tax for standalone aggregated 1,420.07 Million in FY 2022-23 as against 2,148.73 Million in Previous year.

Profit after tax (PAT)

The profit after tax ("PAT) for Consolidated basis for FY 2023 and FY 2022 was 1,163.68 Million and 1,676.97 Million, respectively. The PAT attributable to shareholders for FY 2023 was Rs 1,159.92 Million as against 1,674.23 Million in FY 2022

PAT for standalone aggregated to 1,159.92 Million as against 1,674.23 Million in previous year.

Earnings per share (EPS)

EPS for Consolidated aggregated 6.59 in FY 2022-23 as against 9.51 in previous year.

EPS for standalone aggregated 6.59 in FY 2022-23 as against 9.51 in previous year.

The company is engaged primarily in the business of trading in shares and securities and there are no separate reportable segments.

Key financial ratios, along with detailed explanations therefore, including:

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Sr no Ratio	FY 2023	FY 2022	Variance
1 Current ratio	2.17	1.65	31.43
2 Interest Coverage Ratio (Excluding Bank Guarantee Charges)	9.53	12.92	(26.22)
3 Interest Coverage Ratio (Including Bank Guarantee Charges)	5.35	8.68	(38.38)
4 Debt- equity ratio	0.22	0.33	(33.80)
5 Debt service coverage ratio	8.84	11.32	(21.96)
6 Return on equity ratio	19.88	37.57	(47.08)
7 Net capital turnover ratio	0.91	3.80	(76.08)
8 Operating Profit Margin	110.05	103.54	6.29
9 Net profit ratio	75.42	72.24	4.40
10 Return on capital employed	21.18	39.16	(45.92)
11 Return on investment -Mutual Fund	6.60	87.27
12 Return on investment -FD	5.66	5.49	3.10
13 Return on investment in partnership firm (subsidiary)	71.99	87.09	(17.34)

Current ratio: During the year current liabilities has reduced disproportionately than the current assets leading to increase in current ratio.

Interest Coverage Ratio: Fall in income from operation and profit before tax both by around 34% during the year has led to fall in interest coverage ratio.

Debt- equity ratio: Reduction in short term borrowing by around 20% coupled with increase in total equity by around 21% has led to decrease in debt equity ratio.

Return on equity ratio: Reduction in profit after tax by around 31% during the year has led to fall in return on equity.

Net capital turnover ratio: Reduction in revenue from operation by around 34% during the year has led to fall in net capital turnover ratio.

Return on capital employed: Reduction in earnings before interest and tax by around 32% during the year has led to fall in return on capital employed.

Return on investment - Mutual Fund: The return on mutual funds are functions of market dynamics.

Opportunities & Challenges

Your Company with its diversified trading strategy with available liquid funds was particularly well placed to benefits on improvement in the sentiment in market. In the year to come your company will continue to identify opportunities and making investment/trading in select sectors which the management believes have potential to grow your wealth. The volatility in the Indian Capital and Commodities Markets in the financial year under report represents both an opportunity and challenge for the Company.

Risk & Concern

The capital market industry is mainly dependent on economic growth of country and capital market is also further affected by number of issues arising out of International policies of foreign government as well any change in international business environment. The industrial growth is very sensitive which is dependent on many factors which may be social, financial, economical or political and also natural climatic conditions in the country. However, with the positive attitude of country which can mitigate the avoidable risks. Geopolitical tensions, raising commodities prices are some of the affecting factors that the country witnessed during the year under review. The country faced the said concerns with positive measures by way of making amendments or introducing new laws that can assist to grow the economy. Foreign investors are very positive for India and trust its policies which are very much investor friendly. It is expected that the said efforts shall continue during the coming years irrespective of the Government which is in power.

INTERNAL CONTROL SYSTEM

The Company has an adequate system of internal control, which assures us of maintaining proper accounting records and reliability of financial information. The Company ensures adherence to all internal control polices and procedures as well as compliances with regulatory guidelines.

HUMAN RESOURCES

The Company continues to strengthen its people capabilities in its quest to build a growing and sustainable business. An increased focus is being maintained to further build employee retention at all levels in the Company. Your Company gives significant importance to its human capital and is dedicated for continuous enhancement of their skills and knowledge by way of training and supervision. Your Companys belief in trust, transparency and teamwork improved employee productivity at all levels.

CAUTIONARY STATEMENT

Statement in this Management Discussion and analysis describing the Companys objective, projection, estimates and expectations may be forward looking statement within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. Several factors could make a significant difference to the Companys operations. These include economic conditions, Government regulations and Tax Laws, Political situation, natural calamities etc. over which the Company does not have any direct control.