Dollar Industries Ltd Management Discussions.


The operating and financial review in this discussion pertains to the managements perspective on the financial condition as well as the operating performance of the Company for the FY 2019-20. The following discussion of the Companys financial performance and operating results should be read in conjunction with the Companys Financial Statements and Notes thereto and other information included elsewhere in the Annual Report. The Companys Financial Statements (Consolidated and Standalone) were prepared in compliance with the requirements of the Companies Act, 2013.

Indian economic overview

There was a decline in consumer spending that a_ected Indias GDP growth. Indias growth for FY 2019-20 was estimated at 4.2% compared with 6.1% in the previous year. Manufacturing growth was seen at 2%, a 15-year low as against 6.9% growth in the previous year. A sharp slowdown in economic growth and a surge in in_ation weighed on the countrys currency rate; the Indian rupee emerged as one of the worst performers among Asian peers, marked by a depreciation of nearly 2% since January 2019. Retail in_ation climbed to a six-year high of 7.35% in December 2019. India emerged as the _fth-largest world economy in 2019 with a gross domestic product (GDP) of US$2.94 trillion. During the last week of the financial year under review, the national lockdown a_ected freight tra_c, consumer o_take and a range of economic activities, a_ecting sales growth and sentiment.

Source: (The Economic Times, IMF, CSO)

Key government initiatives, FY 2019-20

India was a US$ 1.85 trillion economy in 2014 that grew to US$ 2.7 trillion in _ve years, emerging as the fastest growing major economy and the sixth largest economy, compared to 11th largest in 2013-14. Indias target is to emerge as a US$ 5 trillion economy in _ve years and a US$ 10 trillion economy in eight years thereafter.

Total capital expenditure was projected at H876,209 cr (US$ 131.43 billion) for FY 2019-20.

Under the Interest Subvention Scheme for MSMEs, H350 cr (US$ 52.50 million) was allocated for FY 2019-20.

Indias vision for the decade

Increased Make in India with an emphasis on MSMEs, start-ups, defence manufacturing, automobiles, electronics, batteries and medical devices

Building physical and social infrastructure

Digital India reaching every sector of the economy ‘Har Ghar Jal by 2024 Housing for All by 2022 Transition to a Blue Economy

Healthy society based on the principles of Ayushman Bharat, nourished women and children coupled with enhanced safety Source: (

Indian textile industry overview

Indias textile and apparel exports stood at US$ 38.70 billion in FY 2019-20.The Indian textiles industry is diverse across the hand-spun and hand-woven segments at one end of the spectrum and the capital-intensive sophisticated mills at the other . The decentralised power looms/ innerwear and knitting sector accounted for the largest component of the textiles sector. The textile industry comprised around 4.5 cr workers including 35.22 lac handloom workers.

Government Initiatives

Under Union Budget 2020-21, a National Technical Textiles Mission was proposed from FY 2020-21 to 2023-24 at an estimated outlay of H1,480 cr (US$ 211.76 million). In September 2019, textile exports increased 6.2 % following GST implementation compared to the pre-GST period.

The Government of India announced a Special Package to boost exports by US$ 31 billion, create one crore jobs and attract investments worth H80,000 cr (US$ 11.93 billion) from 2018-2020. The Government of India increased the basic customs duty to 20% from 10% across 501 textile products to boost Make in India and indigenous production.

Source: (


Following the Covid-19 crisis, the Indian textile sector is expected to report reasonable growth. Countries that had been depending on China are seeking alternative raw material sources. India is expected to emerge as a preferred destination. Besides, UKs exit from the European Union could provide an edge to India in increasing exports.

Indian innerwear industry

In the past, innerwear was viewed as an essential ‘commodity in India, its market fragmented and unorganised. This scenario changed following the introduction of Indian and foreign brands. Players now focused on the width of the product range; mens and womens innerwear began to be marketed through retail formats. With rising incomes, higher discretionary spending, rise in number of working women and growing fashion consciousness, the innerwear segment is now expected to gain a new round of traction. Most major brands across the mens and womens segments are expanding their portfolio.

Source: (Marketing mind, Lace lingerie)

Emerging trends in innerwear industry

Shift in innerwear preference Emergence of new age fabric Fashion consciousness

Variety of availability of size, colours and prints

Indias athleisure segment overview

Athleisure is not only a fashion statement but a medium of personality expression. Athleisure represents a combination of trendy sportswear and relaxed apparel. Owing to rapid globalisation and the intervention of digital media, consumers have become fashion-savvy and demanding in terms of comfort and functionality. Before the impact of Covid-19, Indias athleisure segment was estimated to grow 18-20% and projected to touch H54,000 cr by 2020. Of this, the mens wear segment was expected to account for

8-10% growth and the womens and childrens segments 11-15%. This trend of athleisure, majorly driven by millennials, was expected to expand reach beyond urban India to Tier II and Tier III regions. While the scenario appears muted following the pandemic, the fundamental strength of the athleisure segment is expected to become pronounced when consumer sentiment revives.

Dollar Athleisure is a new o_ering which comes in unmatchable stretch fabrics with a _ne skin grip. The _exible and quality fabric is ideal for gym, yoga and sportswear.

Industry growth driver

Health-conscious Indians are driving demand through activities like yoga, swimming, exercising and dancing Global exposure to fashion and healthy lifestyle is catalysing the demand for athleisure in India The comfort and style quotient in a humid country like India is an impetus for growth Customers seek sustainable products that serve all purposes (one product adaptable to all situations) The penetration of smart phones in Tier II and Tier III cities enjoys increased access to e-commerce Environment conscious consumers seek ‘greener products Endorsements by celebrities are catalysing segment growth Source: (Indiaretailing)


Robust demand

Competitive advantage

Government policy support

Increasing investments

Accelerated infrastructure building

Strong consumer spending

Increased export performance

Wide availability of facilities and inputs

Adequate crop yield

Large pool of trained manpower

Increased digitalisation driving e-commerce growth

Increased global demand of knitwear products


Growing economy and domestic market

Increasing demand for hygiene textiles post Covid-19

‘Make in India initiatives by the Government of India

Stringent import policies and hikes in import duties

A steep cut in basic corporate tax rates to 22% for existing companies and 15% to new _rms

Expansion by strengthening channel partners

Integration of Information Technology in supply chain management

Strengthening the value chain by using superior technology and value-added products

Continuous innovation and technology upgradation


Continuous deals and discount strategies

Intense competition

Longer credit periods

Relatively low attention on training


Low consumer sentiment due to the pandemic

Fall in exports of cotton yarn

Inventory pile-ups due to Covid-19

Dearth of workers post Covid-19

Increased resource costs

Closure of malls and retail outlets due to Covid-19

Formation of trading blocks like NAFTA, SAPTA, etc, resulting in a change in the global trade scenario

Mitigation initiatives

Upgrade the production technology to ensure the supply of quality innerwear products, adhere to delivery schedules and build economies of scale Wider promotion of the products through a larger participation in exhibitions and trade fairs. This enhances direct exposure to fashion trends in materials and designs, developing closed relations with buyers and understanding requirements better Product and market diversi_cation, developing strengths in innerwear products comprising man-made _bers besides cotton and exploring newer markets Timely diversi_cation of the product basket, developing core competence. The innerwear industry in India can expand its share in the global innerwear exports and exploit the challenge of the WTO integrated textile trade

The Companys overview

Dollar Industries Limited enjoys a rich sectorial experience of over a decade, with a pan-Indian and global presence. The Companys mission is to emerge as the most liked and respected innerwear brand. Dollar enhanced its brand productivity to stay market-relevant. In line with this aspiration, the Company altered its erstwhile approach to restructure its brand architecture, resulting in the emergence of a ‘New Dollar.

The ‘New Dollar will be present in multiple segments catering to _ve categories, determined by the latest trends and innovative o_erings. Dollar is now positioned as a single brand portfolio addressing every consumer need, supported by collections and innovation.

Dollars financial performance
Basis of preparation Analysis of Balance Sheet
The Company had prepared its financial statements based on Indian Accounting Standard (Ind AS).The financial statements were prepared under the historical cost convention on an accrual basis. Net worth: The net worth of the Company stood at H464.95 cr as on 31 March, 2020, compared to H417.69 cr as on 31 March, 2019.
Figures of the previous years were reclassi_ed/regrouped to con_rm the presentation requirements under Ind AS and the requirements laid down under Schedule III of the Companies Act, 2013. The net worth comprised paid-up equity share capital amounting to H11.34 cr as on 31 March, 2020 (5.67 cr equity shares of H2.00, each fully paid up). The Companys Other Equity for the year stood at H453.60 cr.
Analysis of Statement of Pro_t and Loss Loan pro_le: The total debt of the Company stood at H209.99 cr, out of which the Company has H50.23 cr payable in the current
Total income: Total income of the Company stood at H969.32 cr in FY 2019-20, decreasing by 5.78 % compared to H1,028.75 cr in FY 2018-19. Revenues from the domestic market stood at H900.48 cr and H68.84 cr from exports. _scal. The working capital borrowings of the Company stood at H151.00 cr outstanding in the cash credit account.
Total assets: Total assets of the Company increased to H823.82 cr in FY 2019- 20 compared with H809.98 cr in FY 2018- 19, an increase
Operating pro_t: Operating pro_t or EBITDA decreased by 20.73% during FY 2019- 20 to H109.29 cr from H137.87 cr in FY 2018- 19. of 1.71%.
Depreciation: Depreciation for the year under review stood at H14.21 cr as compared to H11.09 cr in the previous year, down by H3.12 cr. Inventories: Inventories decreased by 6.04% to H304.97 cr during the year under review from H324.56 cr in FY 2018-19. Inventories comprised raw materials worth H58.16 cr and _nished goods work-in-progress worth 246.81 and H cr, of which stock-in-transit comprised H1.47 cr.
Finance costs: Finance costs for the year under review remained _at at H15.29 cr compared to H15.73 cr in the previous year. Total loans and deposits: Total loans and deposits amounted to H3.69 cr.
Other Income: Other Income for the year under review stood at H4.71 cr as against H2.20 cr in FY 2018-19. Current liabilities:
Net pro_t: Net pro_t for the year under review stood at H59.45 cr compared to H75.25 cr in FY 2018-19. Current liabilities stood at H346.19 cr, comprising short-term borrowings of H 204.99 cr and trade payables of H120.34 cr.

Key financial measures

FY 2019-20 FY 2018-19
Financial Stability Ratios
Total Debt/Equity (x) 0.45 0.53
Current Ratio (x) 2.07 1.88
Quick Ratio (x) 1.06 0.96
Interest cover (x) 7.15 8.76
Performance Ratios
Return on Assets (%) 7.28 10.15
RoCE (%) 22.88 32.57
Asset Turnover (%) 118.66 138.70
Working Capital/Sales (x) 0.35 0.31
Return on Equity (%) 12.79 18.02
Pro_tability Ratios
EBITDA (%) 11.28 13.40
PBT (%) 8.23 10.79
PAT (%) 6.13 7.32
E_ciency Ratios
Receivables in days 136.23 112.61
Inventory in days 121.18 110.46
Payables in days 59.41 55.25
Working capital cycle in days 198.00 167.82
Growth Ratios (Y-o-Y)
Net revenue growth (%) (5.78) 11.15
Net sales growth (%) (5.54) 12.14
EBITDA growth (%) (20.73) 9.53
PBT growth (%) (28.14) 15.89
PAT growth (%) (21.00) 17.55


The Companys initiatives in strengthening brand recall, digital connect with consumers or retailers and widening the number of outsourcing agencies, facilitated by implementing ‘work from home, resulted in enhanced agility. We are optimistic that the e_ect of the Covid-19 will recede and consumer sentiment will return, strengthening our prospects.

Risks and mitigations

Pandemic risk

A pandemic is a rapidly spreading infectious disease that could pose a global threat. The last fortnight of the financial year under review was marked by such a pandemic called Novel Coronavirus (COVID-19), resulting in the shutting down of o_ces, factories and restricted consumer shopping.

Mitigation: The impact of COVID-19 in the fourth quarter of _scal 2020 on the Company was not signi_cant. Due to the nature of the pandemic, the Company will continue to monitor developments to identify signi_cant uncertainties relating to revenue in future periods. The Company has considered the impact to the extent known and available currently. However the impact assessment of COVID-19 is a continuing process given the uncertainties associated with its nature and duration. Demand for the products of the Company persisted but due to lockdown restrictions consumption was absent. Since the Company is engaged in manufacturing basic essential hosiery products, the demand for the same is expected to increase gradually with lockdown relaxations coming into e_ect. We look forward for sizable increase in demand as the markets are now gradually operating and logistics are getting normalised. Our dispatches to a few territories have resumed. However, realities are expected to improve gradually as and when markets are opened and logistics improved in due course of time. The markets we serve are undergoing a disruption due to the outbreak of COVID-19. The situation caused by the COVID-19 pandemic continues to evolve and the e_ects on the markets we serve remain uncertain. The outlook for the markets we serve going forward will depend, in addition to other factors, on how COVID-19 continues to a_ect the global economy.

Raw material risk

Risk factors include supply chain changes, shortages, catastrophic events, material quality and consistency issues etc.

Mitigation: The Company studies trends, embarks on strategic initiatives and sources the highest grade of materials. The Company also shares robust relationships with suppliers.

Competition risk

Competitive risk is the possibility that competitive forces could prevent the Company from achieving its goal on account of declining revenues or margins.

Mitigation: The Companys innovation has established the Dollar brand synonymous with superior product quality, comfort and a_ordability. The Company has a fair awareness of its competitors and customers. Its di_erentiated product and marketing strategies mitigate this risk to a large extent.

Interest rate risk

Interest rate risk is the potential for investment losses that could result from a change in interest rates.

Mitigation: The Company has successfully de-leveraged its Balance Sheet to a large extent.

Technology risk

This risk includes a disruption of Companys business due to operational ine_ciencies in existing technologies and IT processes.

Mitigation: The Company emphasises the analysis of security threats and their impact using the latest technologies, which are periodically upgraded.

Market risk

Market risk is the risk of losses in positions arising from movements in market prices.

Mitigation: The Directors of the Company are vigilant on roles and responsibilities in understanding the movements and market situations.

Policy risk

Policy risk concerns the possibility that national governments - acting in their sovereign capacity - amend policy environments in ways that adversely impact the financial stability of the Company.

Mitigation: The Company is proactive in monitoring and addressing these policies in a timely manner.

Workforce risk

Workforce risks can arise from issues such as critical skill shortages, increasing staattrition or signi_cant workforce retirement.

Mitigation: The Company trains its employees and ensures best HR practices, while carrying out improvements and rewards to attract and retain the best talent in the industry.

Human resources and industrial relations

The Companys prudent HR practices have helped reinforced its leadership. Dollars workforce stood at 1,482 as at 31 March, 2020. The male workforce was 997, women workforce 485 and no di_erently-abled employees. Dollar invested extensively in formal and informal training as well as on the- job learning programmes. Dollar reinforced engagements with employees across all levels by providing an enriched workplace, invigorating job pro_le and an on-going dialogue.

Corporate social responsibility

The Company is a responsible corporate citizen, committed to contribute to communities and society. The Company contributes to society in line with its vision by delivering economic, social and environmental Benefits across stakeholders. Dollar delivers sustainable development through CSR activities with a predominating focus on education, healthcare and other causes that represent the building blocks of society.

Health and safety

Dollar is an employee-centric Company, increasingly focusing on the health and safety of employees. The Company provides an accident-free environment. It believes that proper attention to employees safety and well-being enhances employee morale, boosting productivity and reducing attrition at all levels, resulting in world-class health and safety standards.


The Company is optimistic of prospects based on the growing traction of its brand, superior price-value proposition, increased aspirations, penetrated distribution network and the integration of cutting-edge technologies into systems and processes, resulting in a nimbler responsiveness to marketplace developments.

Internal control systems and their adequacy

The Company has e_ective and adequate internal audit and control systems, commensurate with the business size to safeguard assets and protect against loss from any un-authorised use or disposition. Regular internal audit visits to the operations are undertaken to ensure that high standards of internal controls are maintained at each level of the organisation. The Companys internal controls are supplemented by an extensive programme of internal audits, reviewed by management and documented policies, guidelines and procedures.

Cautionary statement

The Management Discussion and Analysis report containing your Companys objectives, projections, estimates and expectation may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. The statements in this Management Discussion and Analysis Report could di_er materially from those expressed or implied. Important factors that could make a di_erence to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors.