Dolfin Rubbers Management Discussions

The Management discussion and Analysis Report is a reflection of the current state of business of the company. It also deals with opportunities and challenges faced by Company and future outlook.


Tyres are one of the most significant parts of an automotive. They support the weight of the vehicle, absorb shock from the r oad surface, and change or maintain a direction. They are primarily used in the automotive industry, one of the rapidly flourishi ng industries in India. According to Invest India, India is expected to become the worlds third-largest automotive market by 2026. The surging production of automobiles is increasing the demand for tyres and aiding the growth of the tyre industry. The escalating export activities of vehicles such as tractors, buses, heavy trucks, and cars are also propelling the market growth. Moreover, the focus on increasing production by the Indian government and the favorable government schemes are augmenting the market growth. Government schemes such as Atmanirbhar Bharat Abhiyan- Self Reliant India provide an economic and compressive package of INR 51,000 Crores to promote manufacturing of the automotive in the country, further fuelling the tyre industry.

The Indian tyre industry is being driven by the surging production of tyres for export and domestic sales. Moreover, the increasing ownership of vehicles due to rapid urbanization and the emergence of the middle class aid the tyre industry. Additionally, the surging demand for tyres for trucks and buses owing to the rising mobility and industrialization is also boosting the market growth. The government initiative to provide INR 18,000 Crores to augment the public bus transport service is expected to augment the market growth. Besides, the imposition on the restriction of import of pneumatic tyres, used in station wagons, racing cars, scooters, and bicycles, among others, by the Indian government in June 2020 is also aiding the production of tyres in the country, further bolstering the market. The reduced production cost and the cheap labour rates in the production of tyres are invigorating the market growth. Further, the availability of natural rubbers and other raw materials at internationally competitive prices is supporting the market growth.

The rising construction industry due to overpopulation and urbanization is accelerating the demand for construction vehicles, which is further propelling the market growth. Additionally, the development of a tubeless tyre that does not require a separate air tube inside it and improves the performance of the vehicle by improving the maneuverability and handling is propelling the market growth. Research and development (R&D) and the launch of advanced and eco-friendly tyres also aid the market growth for tyres. The development of renewable and 3-D printed tyres due to the advancing research in sustainable mobility lubricates the market growth. Other developments such as the automatic sealing of punctures and reduction of the interior vehicle noise will further catalyse the market growth in the forecast period. The development of sustainable and eco-friendly tyre aids the market growth. Future advancements like the development of chip-in tyre, self-inflating tyre, and fossil-free tyre, along with the twin air chamber and tall and narrow design are expected to further invigorate the market for tyre.



The global economy is poised to slow this year, before rebounding next year. Growth will remain weak by historical standards, as the fight against inflation and Russias war in Ukraine weigh on activity.

Despite these headwinds, the outlook is less gloomy than in the October forecast, and could represent a turning point, with growth bottoming out and inflation declining.

Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe. Inflation, too, showed improvement, with overall measures now decreasing in most countries even if core inflation, which excludes more volatile energy and food prices, has yet to peak in many countries.

Elsewhere, Chinas sudden re-opening paves the way for a rapid rebound in activity. And global financial conditions have improved as inflation pressures started to abate. This, and a weakening of the US dollar from its November high, provided some modest relief to emerging and developing countries.

Accordingly, there has been a slight increase in the 2022 and 2023 growth forecasts. Global growth will slow from 3.4 percent in 2022 to 2.9 percent in 2023 then rebound to 3.1 percent in 2024.

In April 2023, the IMF projected global growth at 2.8 percent in 2023, down from 3.4 percent in 2022. The bulk of it over 70 percent is expected to come from the Asia-Pacific region.

Yet, recent high frequency indicators paint a mixed picture: weakness in manufacturing contrasts with resilience in services across the G20 countries and strong labor markets in advanced economies. At the same time, financial fragilities uncovered by tight monetary policy require careful management particularly as restoring price stability remains a priority.

Global headline inflation seems to have peaked, and core inflation has eased somewhat, particularly in India. But in most G20 countries especially advanced economies inflation remains well above central banks targets.

The baseline forecast is for growth to fall from 3.4 percent in 2022 to 2.8 percent in 2023, before settling at 3.0 percent i n 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 percent in 2022 to 1.3 percent in 2023. In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5 percent in 2023 with advanced economy growth falling below 1 percent. Global headline inflation in the baseline is set to fall from 8.7 percent in 2022 to 7.0 percent in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly. Inflations return to target is unlikely before 2025 in most cases.

The natural rate of interest is important for both monetary and fiscal policy as it is a reference level to gauge the stance of monetary policy and a key determinant of the sustainability of public debt. Chapter 2 aims to study the evolution of the natural rate of interest across several large advanced and emerging market economies. Public debt as a ratio to GDP soared across the world during COVID-19 and is expected to remain elevated. Chapter 3 examines the effectiveness of different approaches to reducing debt-to-GDP ratios. Supply-chain disruptions and rising geopolitical tensions have brought the risks and potential benefits and costs of geo-economics fragmentation to the center of the policy debate. Chapter 4 studies how such fragmentation can reshape the geography of foreign direct investment FDI and how it can affect the global economy.

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Indias growth continues to be resilient despite some signs of moderation in growth, says the World Bank in its latest India Development Update, the World Bank Indias biannual flagship publication.

The Update notes that although significant challenges remain in the global environment, India was one of the fastest growing economies in the world. The overall growth remains robust and is estimated to be 6.9 percent for the full year with real GDP growing 7.7 percent year-on-year during the first three quarters of fiscal year 2022/23. There were some signs of moderation in the second half of FY 22/23. Growth was underpinned by strong investment activity bolstered by the governments capex push and buoyant private consumption, particularly among higher income earners. Inflation remained high, averaging around 6.7 percent in FY22/23 but the current-account deficit narrowed in Q3 on the back of strong growth in service exports and easing global commodity prices.

The World Bank has revised its FY23/24 GDP forecast to 6.3 percent from 6.6 percent (December 2022). Growth is expected to be constrained by slower consumption growth and challenging external conditions. Rising borrowing costs and slower income growth will weigh on private consumption growth, and government consumption is projected to grow at a slower pace due to the withdrawal of pandemic-related fiscal support measures.

"The Indian economy continues to show strong resilience to external shocks," said Auguste Tano Kouame, World Banks Country Director in India. "Notwithstanding external pressures, Indias service exports have continued to increase, and the current-account deficit is narrowing."

Although headline inflation is elevated, it is projected to decline to an average of 5.2 percent in FY23/24, amid easing global commodity prices and some moderation in domestic demand. The Reserve Bank of Indias has withdrawn accommodative measures to rein in inflation by hiking the policy interest rate. Indias financial sector also remains strong, buoyed by improvements in asset quality and robust private-sector credit growth.

The central government is likely to meet its fiscal deficit target of 5.9 percent of GDP in FY23/24 and combined with consolidation in state government deficits, the general government deficit is also projected to decline. As a result, the debt-to-GDP ratio is projected to stabilize. On the external front, the current account deficit is projected to narrow to 2.1 percent of GDP from an estimated 3 percent in FY22/23 on the back of robust service exports and a narrowing merchandise trade deficit.

"Spillovers from recent developments in financial markets in the US and Europe pose a risk to short-term investment flows to emerging markets, including India," said Dhruv Sharma, Senior Economist, World Bank, and lead author of the report. "But Indian banks remain well capitalized."


The Automotive industry in India is recognized as a core sector that contributes 49% to Indias manufacturing GDP, 7.5% to the overall GDP at large, and is responsible for around 32 million jobs.

Over the period between FY16 to FY22, the automotive components industry registered a CAGR of 6.35%, reaching US$ 56.60 billion in FY22, with exports growing at a CAGR of 11.89% during FY16-FY22 to reach US$ 19 billion in FY22. The auto components industry accounted for 2.3% of Indias GDP and provided direct employment to 1.5 million people. By 2026, the automobile component sector will contribute 5-7% of Indias GDP. The automobile component industry turnover stood at Rs. 4.20 lakh crore (US$ 56.5 billion) between April 2021-March 2022 the industry had revenue growth of 23% as compared to FY18-19. The Auto components industry is expected to grow to US$ 200 billion by FY26. According to ICRA, Auto ancillaries revenue is estimated to increase by 8-10% in FY23.

Indias auto components aftermarket witnessed a 15% growth from US$ 8.70 billion in 2020-21 to US$ 10 billion in FY22. Strong international demand and resurgence in the local original equipment and aftermarket segments are predicted to help the Indian auto component industry grow by 20-23% in FY22.

As per Automobile Component Manufacturers Association (ACMA), automobile component export from India is expected to reach US$ 30 billion by 2026. The Indian auto component industry aims to achieve US$ 200 billion in revenue by 2026. India has a very strong position in the international market. It is the largest manufacturer of tractors, second-largest manufacturer for buses and the third largest for heavy trucks in the world. Indian automotive industry (including component manufacturing) is expected to reach between Rs. 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Indian automobile sector recorded an inflow of huge investments from domestic and foreign manufacturers. FDI inflow in the sector stood at US$ 33.54 billion between April 2000-June 2022.

Domestic automobile production increased at 2.36% CAGR during FY16-FY20 with 26.36 million vehicles being manufactured in the country in FY20. Production of two wheelers, passenger vehicles, commercial vehicles and three wheelers reached 17.71 million, 3.65 million, 0.80 million, and 0.75 million, respectively, in FY22. In FY22, the total output of passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and quadricycles was 22,933,230 units. Automobile export is expected to grow at a CAGR of 3.05% during 2016-2026. The Government of India expects automobile sector to attract US$ 8-10 billion in local and foreign investment by 2023.

The Indian government announced a PLI scheme in February 2022. Under the PLI Auto scheme, the government received investment proposals worth Rs. 45,016 crore (US$ 6.04 billion) from 20 automotive companies. This scheme is expected to generate Rs. 2,31,500 crore (US$ 31.08 billion) in additional output. In December 2022, Union Minister of Road Transport and Highways, Mr. Nitin Gadkari, directed automakers to start producing flex-fuel vehicles in the next 6 months.


The India tyre market attained a volume of 179.16 million units in 2022, driven by the surging automotive industry. Aided by the growing production of tyres, the market is expected to witness a further growth in the forecast period of 2023-2028, growing at a CAGR of 6.68%. The market is projected to reach a volume of 263.26 million units by 2028.

Based on its vehicle types, the tyre market can be segmented into passenger car, light commercial vehicle, medium and heavy commercial vehicle, two wheelers and three wheelers, and off road, among others. On the basis of design, tyres are segmented into radial and bias. The major types of tyres are tube and tubeless tyres. On the basis of distribution channels, the market is divided into OEMs and replacement. Based on the tyre size, the market is divided into small, medium, and large. The major price segments of the tyre market are low, medium, and high. The major regional markets for tyres are North Region, East Region, South Region, and West Region. The key players in the above market include MRF Limited, Apollo Tyres Limited, CEAT Limited, JK Tyre & Industries Ltd, Balkrishna Industries Limited (BKT), TVS Srichakra Limited, The Goodyear Tire & Rubber Company, Bridgestone Corporation, Continental Tyre Group Limited, and Metro Tyre Limited, among others.


After facing adversity due to the Covid pandemic and Russia-Ukraine war, your Company is very optimistic about the growing demand of tires despite current adversities like supply chain bottlenecks and unprecedented increase in freight and prices of raw materials. The company sees a continual development for replacement tires and tubes with improved market share. The revival in demand is linked to the output and investment in the advanced economies as they are expected to cross the pre-pandemic levels which will drive up volumes in the coming fiscal year. The long-term prospects of the company are good and promising as your Company continues to explore all the avenues to ensure growth of its business which includes deeper penetration into new and existing markets.


The Company is mainly engaged in the business of Manufacturing of Rubber Tyres and Tubes, so the Management considers as this is the only business segment of the Company.



(INR. in lakh)


2022-23 % to Total Income 2021-22 % to Total Income
Revenue 10164.80 99.87 8350.29 99.72
Other Income 13.59 0.13 23.46 0.28

Total Turnover

10178.39 100 8373.75 100

lakh in the year 2021-22 (previous year).


The details of the financial performance of the company appear in the Balance Sheet, Profit & Loss Account and other financial statements forming part of this Annual report. For financial highlights please refer heading ‘FINANCIAL RESULTS of Boards Report.

Risk Management

Risk management is the process of identifying, assessing, and prioritising risks, then deploying resources in a coordinated and cost-effective manner to reduce the probability and/or impact of uncertain occurrences, or to optimise the realisation of opportunities. When there are competing demands on limited resources, risk management provides a mechanism for prioritising. Risk management also aims to detect and manage dangers that could have a significant impact on the company or even bring it down. The risks are classified into strategic risks, operational risks, financial risks and external risks. The Companys proactive approach towards identifying risks and developing mitigation strategy has led to creation of a resilient business model. Its approach to the unforeseen challenges has strengthened its core over the past 28 years, making it stronger and better every day.

Opportunities and Threats

Opportunities remain immense as India is one of the highest growing economy at just below than $4 trillion economy. With rise in demand in OE and replacement segment, new opportunities awaits for the company.


• Highly efficient Human Resource A Company needs a talented and proficient human asset to become bigger. Dolfin Rubbers Limited is honored with immense human force all through with great skills. They have put resources into getting assets, and the arrival they get is large.

• Good Organizational Culture While it comes to cutting edge working framework and practical methodologies, your Company will consistently be on the top. From generally rehearsed administration framework to lean assembling subtleties, the Company has set models for the individual organizations.

• Holds an Excellent Brand Image This is one of the most significant strategies of Dolfin Rubbers Limited. At whatever point individuals search for vehicles, they look for the brand name ‘Dolfin Rubbers Limited, and that has kept them a long way in the replacement market.

• Diversified Portfolio Your Company have an enormous number of variants and models of 2 and 3 Wheelers. Dolfin Rubbers Limited. has spread its wings to a wide range of vehicles in this market.

• Throughout India Supply Chain They have outlets, branch organizations, fabricating production lines far and wide. The Indian sales network of Dolfin Rubbers Limited is extremely one of the best quality of this organization.

• High Production Capability Dolfin Rubbers Limited is giving genuine challenge to its peers on this point as they have a high generation limit of creating more than 5 Lakh tyres both tubeless and tube type and more than 50 Lakh tubes every year.


• Competition: The organization faces strong competition from rival companies as well as from local players in each regional market in which they work.

• Price fluctuations: The cost of raw materials for tyres, including prices of synthetic rubber, carbon black, chemical solvents, etc., are all extremely unpredictable, posing immense challenges for tyre firms.

• Government Policies: Change in Government policies can adverse effect on the company.

• Competitors Pricing and Discount offers can be a major threat to the company.

• Cheaper Tyres in China: Imported Chinese tyre goods are cheaper and thus pose a tough market competition. Imports by the Chinese will adversely affect the profitability of Goodyear Tyres.

• Volatility in rubber production: Indian rubber production is volatile and generally lower than the demand produced, and therefore the price of rubber fluctuates in light of demand. It has an impact on the firms pricing policy.

Adequacy of Internal Control Systems

The Company have an adequate Internal Control Systems in process which ensures that all the transactions are satisfactorily recorded and reported and all assets are protected against loss from an unauthorized use or otherwise. The Internal control system is adequate and commensurate with the nature of its business and size of its operations, though continues efforts are being made to strengthening the same. The management also reviews the internal control systems and procedures to ensure its application.

Material Development in terms of Human Resources

The Company always believes that its growth is closely linked with the growth and overall development of its employees and to create an environment where excellence is recognized and rewarded. The target is to place right people at right position and to enhance the efficiency, working speed, competency and time management skill of its employees. The Companys endeavour is to create an environment where people can use all of their capabilities in promoting the business of the Company. Number of on rolls people employed as on March 31, 2023 is 579. The industrial relation continued to remain cordial during the year.


As per SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to provide details of significant changes (change of 25% or more as compared to immediately previous financial year) in key financial ratios. Accordingly, the Company has identified the following ratios as key financial ratios:-


Unit FY 2022-23 FY 2021-22 % Change
Current Ratio Times 1.73 1.69 2.43
Debt Equity Ratio Times 0.53 0.48 10.06
Debt Service Coverage ratio Times 5.20 7.11 -26.88*
Inventory Turnover Ratio Times 6.92 8.12 -14.80
Trade Receivables Turnover Ratio Times 7.42 6.84 8.57
Trade Payable Turnover Ratio Times 13.32 17.22 -22.61
Net Capital Turnover Ratio Times 8.08 9.18 -11.98
Return on Equity % 14.33 13.59 5.45
Net Profit Ratio % 3.26 3.36 -2.92
Return on Capital Employed % 19.03 18.77 1.38

*Due to increase in debt.

Cautionary Statement

Statements made on Management Discussion & Analysis, describing the Companys expectations or predictions are "forward-looking statements". These statements are based on certain assumptions and expectation of future events. The actual results may differ from those expected or predicted. Prime factors that may make a difference to the companys performance include market conditions, input cost, Government policies/regulations, economic conditions, and other incidental factors.

For and on behalf of the Board

Dolfin Rubbers Limited

Kawaljit Singh

Chairman & Managing Director

Date: 17th July, 2023

Place: Ludhiana