finolex industries ltd share price Management discussions


1.1 Indian economy

India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers over the next decade. As per estimates, the Indian economy is expected to have grown at 9.2% in FY22. During the fiscal year that ended on March 31, 20221, the nation?s nominal GDP is estimated to be $3.12 trillion. Economic reforms and a high vaccination rate have laid a firm foundation for sustained growth in the Indian economy.

The agriculture sector has seen a growth of 3.9% in FY222 as compared with 3.6% in the previous year. The area sown under Kharif and Rabi crops along with the production of wheat and rice has been steadily growing over the years and the agriculture and allied sectors are considered as having been the least impacted by the pandemic. A combination of good monsoon rains, supported by government policies ensuring the timely supply of seeds and fertilisers have resulted in an estimated record level of 150.50 million tonnes of food grain production for the year.

Similarly, the industrial sector is expected to see a large expansion of 11.8% in FY22 from a contraction of 7% in FY21. This was also observed in the manufacturing, construction, and mining sub-sectors. The services sector has seen sub-sectors such as IT-related services, finance, real estate and public administration segments reach above pre-COVID levels, while others such as travel and hotels are yet to fully recover.

Faster normalisation of economic activity along with rapid coverage in vaccination are some of the factors leading to growth in consumption in FY22. Government consumption has also grown and is expected to grow further to surpass pre-pandemic levels. In addition, private consumption is also estimated to have improved significantly to recover a large majority of pre-pandemic output levels and is expected to see a stronger recovery. Investment is also predicted to see strong growth of 15% in FY223, as measured by Gross Fixed Capital Formation (GFCF). The government?s push on quickening the cycle of growth via CAPEX and infrastructure spending has increased capital formation in the economy, thus lifting the investment of the GDP ratio, the highest seen in seven years. Although private investment is still at a nascent stage in India, the banking sector, which has recently been refinanced, is expected to support increased growth in investment. Indian exports have seen huge growth y-o-y with FY22 seeing a record of $418 billion4 in comparison to $291.80 billion, in FY21. While the situation in Ukraine has led to an increase in crude oil prices, the Indian economy could expect to benefit in other areas, such as the export of wheat to countries affected by the Russia-Ukraine war. India?s balance of payments remained in surplus over the last couple of years. This has allowed has allowed for an accumulation of foreign exchange reserves, which stand at $622.275 billion4 in the week ended 11th March, 2021.

Further waves of COVID-19, huge increases in the prices of commodities and crude oil, and transportation costs could increase pressure on consumers. However, government policies, along with a boost in revenues including direct and indirect taxes and record GST collections, have all combined to lay a solid foundation. This has predicted GDP growth of 8.2% in FY23, as per IMF5.


There are risks with new waves of COVID-19 being at the fore, along with the Russia-Ukraine conflict, presenting a challenge to the post-pandemic global recovery. Sectors such as automobiles, pharmaceuticals, gems & jewellery, and fertilisers are facing some difficulties due to the conflict.

The downside risk to the Indian economy also depends on the continuation of the conflict in Ukraine. Although the economy may not be directly impacted as India?s trade exposure to both countries is relatively limited, there would be indirect consequences to deal with. A combination of inflationary pressures, fluctuations in currency rates, high crude oil prices, and forecasted demand moderation in developed countries are some of the factors that could affect the economic recovery. Mitigating this potential impact on growth would require close coordination between the government and the RBI.

Economic recovery depends on the government?s infrastructure-led capital expenditure, a proactive fiscal policy along with excise cuts or subsidies to control inflation. Keeping a keen eye on the ground is critical to ensuring recovery despite the external situation that could potentially impact the economy.

However, agriculture and allied sectors have been forecasted to grow at 3.30% in FY23, thereby continuing their sustained growth over the last few quarters. In addition, the industry and services sectors are expected to grow by 5.9% and 8.5%, respectively.


As per Allied Market Research, the global polyvinyl chloride (PVC) pipe market is expected to reach $85.56 billion in 2022 and continue to grow. This is reflected by the diversity of usage among sectors that include Housing, Construction, and Infrastructure along with Agriculture.

The government has allocated _60,000 crore6 in the Union Budget 2022 for the flagship scheme – ‘Har Ghar Nal se Jal? – to provide tap water to rural households. This translates to a 20% increase in budget allocation under this scheme. And, this will be most advantageous to organised pipe manufacturers, as the existing regulation encourages the participation of ISI marked pipes for application in any government project.

As per the finance minister, the current coverage of the scheme covered 87 million7 households, of which 55 million have been provided with tap water in the last two years. Therefore, the allocation of _60,000 crores has been made to cover 38 million households in FY23.

While unorganised players have a chance to participate in government projects if they can upgrade facilities and get an ISI certification, the biggest beneficiaries are the large, organised players which have already got a strong presence in the rural market. Additional government schemes such as Housing for All, AMRUT – Atal Mission for Rejuvenation and Urban Transformation, Swachh Bharat Mission, Jal Jeevan Mission, and Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) would further help boost demand in the piping industry within India.

These schemes, combined with market regions with relatively low penetration, such as the North East of the country, would ensure that the piping industry has the parameters for sustained high-growth moving forward. India?s plastic pipes industry is estimated to grow 11-12% CAGR over FY21-FY258 and reach _550 billion to _600 billion by FY25. While a significant share of the market remains unorganised, there is a higher uptick in the market share growth of organised players. Currently, approximately 65% of the Indian piping industry is organised. The UPVC segment being 57-58% organised, and CPVC market segment being 80% organised. India is the fastest growing consumer of PVC and there remains large scope for sustained growth. Pipes and fittings form 73% of the end consumer market for PVC in India with the top 5 players expected to consolidate gains. The biggest drivers of growth in the Indian piping industry are the rising demand for the irrigation, water supply and sanitation sectors, in addition to the demand for replacement of metal pipes in the residential real estate market.

Raw material cost-inflation combined with tax compliance becoming more stringent, has led to an increasing capture of market share by large organised players. This is expected to continue with the largest organised players gaining more market share even when compared to other regional organised companies who have struggled with growth.

The piping market is being driven by rapid urbanisation , demand for large and cost-effective sewage lines, rising activities and infrastructure developments, in addition to the factors mentioned earlier.

2.1 PVC pipes and fittings

The usage of PVC pipes and fittings is vast and they are the most widely used plastic pipes in the world. They are strong, durable, cost-effective, lightweight, free from corrosion, easy to install and long-lasting. The most common applications of PVC pipes and fittings are plumbing, sewerage, irrigation and water supply. Further, the market in India,is driven by a high rate of urbanisation which has created a demand for larger and cost-effective sewage lines, construction activities, and infrastructure development.

Over the years, the applications of PVC pipes have grown. Currently, Pipes and Fittings are used for the following:

• Irrigation schemes

• Potable water supply lines

• Biogas plants

• Rising main and distribution lines

• Main lines for sprinkler and drip irrigation

• Household and domestic applications

• Bore-well casing

• Industrial mining

• Sugar, paper and distillery lines

• Cold water plumbing applications

• Piping systems for swimming pools

• Pipes for hand pumps

• Industrial process lines

• Hospitals

• Academic institutes

• Hotels and resorts

• Manufacturing plants

• Highrise and independent houses

• Water discharge systems

• Venting of gases & odours in domestic plumbing

• Non-pressure industrial drainage application

• Rainwater transportation and harvesting

• Gravity drainage

• Transportation and discharge of industrial effluents

• Stormwater drainage

• Sewer flow


PVC resins are produced by a process called polymerisation of vinyl chloride and then blending them with additives. It is the third largest plastic in production and consumption. Technology has gradually improved over time with improvements in safety, product quality, production volume, environmental issues and cost. PVC resins are used in pipes and fittings, profiles and tubes, windows and doors, sidings, wires and cables, film and sheets, toys and other moulded products and floorings. Asia-Pacific is the largest market for PVC products, accounting for more than 50% of the global PVC market. A growing agriculture sector, infrastructure development, rapid industrialisation, favourable government policies, rising urbanisation and growing usage of PVC in flooring applications across private, commercial and industrial premises are expected to contribute to the growing demand for PVC resin.


Finolex Industries Limited (Finolex / FIL/ Finolex Pipes) is one of India?s most trusted brands in pipes and fittings and a leading producer of PVC resin, making it the largest backward integrated pipes company in India. We offer a wide range of PVC pipes and fittings suitable for applications in agriculture, plumbing and sanitation. With three state-of-the-art manufacturing facilities in Maharashtra and Gujarat, we have a pipes and fittings production capacity of 3,70,000 MT per annum and a PVC resin manufacturing capacity of 2,72,000 MT per annum.

4.1 Quality and durability of Finolex Pipes

Finolex is one of the largest producers of PVC pipes and fittings in India while also being a leading manufacturer of PVC resin. We offer a cutting-edge range of the highest quality PVC-U pipes and fittings that are known for their durability, as evidenced by feedback from the agriculture, construction and industrial sectors. We take huge pride in the dependable quality of our products, which is also transferred to every aspect of our functioning, including our dealers, vendors and suppliers. This is achieved by aligning every decision, action and resource towards the delivery of superior quality pipes and fittings over the last 41 years.

From our focus on the management of raw materials to last-mile fulfillment, meeting customer expectations by upgrading machines and processes is the sole focus of our organisation to ensure that our standards never drop. The evidence of our quality standards is reflected in the foundation of our manufacturing operations. With our ISO 9001:2015 certified Urse, Masar and Ratnagiri pipe plants, we can maintain the reliability and quality of our products and services across the country.

The flagship facility of Finolex is in Ratnagiri, which consists of an open sea cryogenic jetty and storage facility to receive raw materials. The quality standards are reflected in our management system certifications including ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018. Further, a PVC resin manufacturing facility ensures that all our pipe manufacturing facilities receive a dedicated supply of consistent and superior quality resin. Our products being abrasion-resistant, with added mechanical strength, more toughness and high durability, have led to Finolex being a leader in housing and potable water applications in the plumbing industry. The stringent quality assurance approach implemented across our facilities and in all stages of manufacturing gives our products a high degree of reliability. The Finolex passion for quality is shared by over 900 dealers and 21,000 retail touchpoints across the country, leading to the creation of trust among our customers. This is a solemn promise that we continue to keep and improve on, every day.


Whether building residential or commercial properties, a well-maintained plumbing and sanitation system is a prerequisite to ensure hygiene and safe drinking water. To meet the growing demand of future houses and smart cities, PVC Pipes provide an ideal solution. PVC Pipes are manufactured and fit-for-purpose, ensuring a high degree of hygiene and safe removal of waste water. From carrying liquids, gases, or waste – PVC Pipes are the present and future of the plumbing and sanitation sector of the nation, while also driving employment opportunities for millions of people.


• Sugar industry, Paper industry, Distillery lines

• Cold water plumbing

• Piping systems for swimming pools

• Pipes for hand pumps

• Water distribution mains

• Industrial process lines

Features & Benefits:

• Lead-free, and environment and health friendly

• UV stabilised ensuring protection from direct sunlight

• Ideal for potable water transportation

• Meets global standards for housing and industry application

• Tough, durable, and immune to termites

• Corrosion-free and chemical resistant

For more information, refer our website https: //www.f

CPVC Pipes and Fittings:


• Hospitals

• Academic institutes

• Hotels and resorts

• Swimming pools

• Manufacturing plants

• High rise and independent houses

Features and Benefits

• Lead-free and environmentally friendly

• UV stabilised

• Ideal for hot and cold-water applications

• Fire resistant

• High impact strength

• Leak proof joints

• Corrosion-free

For more information, refer our website https: //www.f

SWR Pipes and Fittings:


• Waste discharge systems

• Venting of gases and odour in domestic plumbing

• Non-pressure industrial drainage

• Rain water transportation and harvesting

Features and Benefits

• UV stabilised

• Corrosion and rust-proof

• Lightweight

• Non-reactive to acids, alkalis, effluents, salts, and minerals

• Good resistance to combustion

• Stringent quality control

For more information, refer our website https: //www.f

Sewerage Pipes:


• Gravity drainage

• Transportation and discharge of industrial effluents

• Drainage of surface water

• Sewer flow for transportation of soil and water discharge

Features and Benefits

• Corrosion and rust-proof

• Good resistance to combustion

• Non-reactive to acids, alkalis, effluents, salts, and minerals

• Self-socketed pipes help save time

• Low frictional losses and scale formation

• Non-conductor of electricity

For more information, refer our website https: //www.f


About 58% of India?s population regards the agriculture sector as its primary source of livelihood. Currently, India is the largest producer of spices, pulses, milk, tea, cashew and jute while also being the second-largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds. The agriculture sector was COVID-19 resistant and has experienced growth in the last two years. Being the largest employer of the workforce, the agriculture sector accounted for 18.8% of the Gross Value Added (GVA) in FY22 and improved growth by 3.9% in the same financial year. Moreover, growth in the allied sectors including livestock, dairying and fisheries have experienced high growth and have acted as drivers while also contributing to the government?s push to improve farmers? income.

FY22 saw record food grain production and hit 150.50 million tonnes in the Kharif season, which is an increase of 0.94 million tonnes from FY21. In addition, as of 27th October 2021, the total Rabi area stood at 0.53 lakh hectares.

Agriculture and processed food exports hit $21.50 billion by February 2022 against a target of Rs 23.70 billion for March 20229. This was achieved by exports such as Maize which was up 22% y-o-y, hitting an all-time high of $816.31 million in FY2210. All in all, farm exports surpassed the $50 billion11 mark in FY22 with marine products, spices, sugar and cereal (rice and wheat) being the main contributors.

The government has placed importance on promoting the production of oilseeds, given the high import of edible oil. Towards this goal, it is pertinent to note that production of oilseeds has steadily increased and grown by 43% between FY16 and FY21.

Government initiatives include promoting micro-irrigation via dry and sprinkler systems under the ‘Per Drop More Crop? component of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY-PDMC). Other schemes and initiatives such as enhancing allocation to the rural infrastructure development fund, SWAMTIVA scheme, and pushing crop diversification with Minimum Support Price (MSP) are all suggestive of the agriculture and allied sectors experiencing sustainable growth.

6.1 Overview of Finolex Pipes used in the agriculture sector

PVC-U Pipes (Selfit and Ringfit):


• Irrigation schemes

• Potable water supply lines

• Biogas plants

• Rising main and distribution lines

• Main lines for sprinkler and drip irrigation

• Household applications

Features and Benefits

• Non-reactive to acids, alkalis, effluents, salts, and minerals

• All weather jointing

• Quick installation with Ringfit pipelines

• Low frictional losses and scaling

• Increased product life

For information, refer our website


• Domestic

• Irrigation

• Bore-well casing

• Industrial Mining

Features and Benefits

• Lead-free

• Excellent stiffness helps pipes withstand external pressure

• Horizontal slots enable laminar flow into the borewell reducing losses in the entrance of borewell

• Non-conductors of electricity

• Maintenance free and economical

• Manufactured from a special PVC-U compound with extra toughness

• Increased permeability due to continuous ribs

• Easy and quick installation

For more information, refer our website https: //www.f

Column Pipes


• Ideal for both urban and rural applications as they are used for efficient extraction of water from borewell in either area

Features and Benefits

• Lead-free

• High tensile strength

• High torque resistant locking system ensures stable joint

• Light weight

• Easy to install

• Anti-abrasion and anti-corrosion

For more information, refer our website https: //www.f

Solvent Cement


• To facilitate strong and consistent joints between pipes, fittings, or pipe to fitting combinations

Features and Benefits

• High quality applicator for user-friendly and smooth application

• Colour coded solvent packaging for ease of identification

• Non-toxic and non-flammable

• Environmentally friendly due to low VOC emission For more information, refer our website https: //www.f


While factors such as rising input costs and disruptions to supply chain logistics could have temporary impacts, our company has been able to innovate and adapt to expand our presence. From expanding our product range and distribution network over the years, and strengthening our presence in the non-agriculture market and adapting to growing markets such as CPVC pipes, our Company is ready and prepared for the future.

7.1 Stronger with long lasting and durable pipes

• 41 years of product excellence – Over the last fourdecades,Finolexhaspersistedinimproving and perfecting its product range by using the highest quality raw materials combined with state-of-the-art technology and manufacturing processes. The approach to creating strong and durable pipes has seen us steadily add depth to our products and we have never compromised on our quality standards.

This constant drive to build quality into every aspect of our business has also seen our network of dealers and retail touchpoints grow by leaps and bounds.

• Backward Integration in PVC Resin – One of the biggest advantages that have led to the huge manufacturing capacity of Finolex is the backward integration it enjoys with its PVC Resin plant making our company the only one of its kind in India.

The advantages of backward integration are numerous, starting with cost optimisation. This has been achieved thanks to the foresight of our leaders. With Finolex now owning its own jetty in Ratnagiri we import raw materials from the market, and use it in the manufacturing of PVC Resin. This steady supply of raw material allows Finolex to control and maintain the quality of our products. In addition, the Ratnagiri facility includes a power plant ensuring a steady power supply and further reducing manufacturing costs. All these factors ensure our company can maintain the quality of raw materials and finished products, optimise costs, and remain at the top of our industry.

Robust manufacturing plants – Finolex has three manufacturing plants. Two in Maharashtra (Ratnagiri and Urse) and a third in Gujarat (Masar). Our insistence on quality is reflected by the ISO 9001:2015 certification that all our manufacturing facilities hold.

Our flagship facility in Ratnagiri stands on 650 acres of land that includes its own open sea cryogenic jetty to receive raw materials, storage facilities to stock them, a PVC pipe manufacturing plant, and a PVC Resin manufacturing facility in technical collaboration with Uhde GmbH, Germany and Hoescht Technology. In-house Resin manufacturing ensures that all our pipe manufacturing plants across locations receive a dedicated supply of consistent and superior quality Resin.

The keyword is quality. Finolex can ensure quality across its three facilities by using the latest technologies and most up-to-date manufacturing processes, which all lead to the further enhancement of value and the brand.

7.2 Stronger through long-lasting relationships

• Our Company values the support of its stakeholders and takes proactive measures to interact with them. It is of paramount importance to our leadership team to ensure that there is regular interaction with our stakeholders to understand their concerns and interests. Through our various CSR activities, we serve the underprivileged sections of society so as to ensure inclusivity. Our various modes of engagement led to long-lasting relations with stakeholders and society.

7.3 Stronger for empowered communities

Our Company?s responsibilities do not end with our products and services but extend toward the building of our nation. This is just the beginning of our work towards empowering the people of India. We are constantly striving to impact the lives of the communities we serve through our partnership with the Mukul Madhav Foundation. Our vision is to connect people and nurture their dreams and aspirations by equipping them with skills and elevating the standard of living of underprivileged communities.

From educational facilities, hospitals and healthcare programmes, sanitation and environmental support to social welfare initiatives, we don?t simply donate funds, we endow dignity.

Mukul Madhav Foundation

Our CSR partner, the Mukul Madhav Foundation (MMF) is an India-based charitable trust founded in 1999 with an overseas office in London, U.K. Registered under the Bombay Charitable Act 1950, MMF?s mission is to help the most vulnerable communities with quality healthcare, education, equality, clean water and sanitation, thereby uplifting their standard of living and empowering people to rise above their circumstances. Together, our Company and MMF are building a legacy that inspires and unites.

These are our focus areas:

• Agriculture and rural development projects

• Ensuring environmental sustainability

• Eradicating extreme hunger and poverty

• Promotion of education

• Promotion of vocational skills and livelihoods

• Promoting gender equality and empowering women

• Promoting preventive healthcare

• Promoting sports

• Safe drinking water and sanitation

• Support the differently-abled

• Technology incubators

• Support for armed forces/veterans

• Contribution to Swachh Bharat Kosh Clean Ganga Fund

• Animal welfare


Our Company continues to remain vigilant to any threats that the business may face and we are committed to be prepared for unforeseen circumstances through good governance, forethought and planning.

Re-occurrence of COVID-19 pandemic-like conditions

COVID-19 remains foremost in our thoughts and is still considered a threat to businesses worldwide. While many may consider the economy to have entered a post-pandemic phase, the rise of COVID-19 cases in other countries hints at potential threats. The construction industry has previously felt the strain during COVID-19 as workers are inherently required on construction sites and unable to work remotely. Employee safety remains a moral imperative and vigilance must be maintained accordingly.

Low consumer spending

Geopolitical tensions combined with an economy still recovering from the pandemic has shown that consumers spending has increased but has not surpassed pre-pandemic levels yet. Job losses, wage reductions, and increased medical expenditure due to the pandemic may continue to stay in consumers minds and dampen spending.

Rise in costs

The Russia-Ukraine conflict has led to a rise in oil prices and other products related to the agriculture sector such as fertilisers, Potassium etc. Supply chain disruptions have led to inflation in multiple economies. The impact from inflation is not restricted to agriculture. It will also reflect in the housing sector and many of the banks in India have increased their retail prime lending rate on housing loans. Further, India?s Wholesale Price Index (WPI) has also seen a hike in March, 2022.


Particulars Unit FY 2022 FY 2021 Variance Reasons for variation of >25%
Revenue Rs Crore 4,647 3,462 34% Higher volumes and increase in share of revenue from plumbing and sanitation
EBITDA Rs Crore 1,024 989 3% -
EBITDA margin % 22.03% 28.57% -23%
PAT Rs Crore 1053 728 45% - Attributable to exceptional gain of Rs 376 Cr on transfer of leasehold rights
PAT margin % 22.67% 21.03% 8% -
RoCE % 67.09% 65.03% 3% - Increased finance costs in the
Interest coverage ratio Times 72.66 136.08 -47%
Debt-equity ratio Times 0.07 0.07 8% -
Inventory turnover ratio Times 2.95 2.17 36% Improvement in inventory turnover cycle
Debtors turnover ratio Times 19.27 31.31 -38% Debtors turnover ratio decreased by 38.5% due to increase in average debtors in FY 2021-22 in line with increase in share of revenue from plumbing & sanitation
EV/EBITDA Times 9.37 7.95 18% -
Market capitalisation Rs Crore 9,596 7,864 22% -
Current ratio Times _ Per share 1.20 1.26 -5%
EPS 16.98 11.73 45% - Attributable to exceptional gain of Rs 376 Cr on transfer of leasehold rights
Return on net worth % 27.27% 23.69% 15% -

Transparency in information sharing

Transparency means the availability of full information that is required for collaboration, cooperation and collective decision making. It involves being totally vulnerable to scrutiny and reasonable judgment with the provision of accurate information. The Company understands the value of transparency for building lines of communication, and for propagating its culture with authenticity and competency.

The Company believes in upholding the utmost transparency across all its business operations and therefore considers it a prime responsibility to disclose relevant information to its stakeholders. The Company also strives to provide the maximum possible information in the Management Discussion and Analysis segment of the Annual Report.


Risk Economic risk Mitigation
A repeat of major events such as a recurrence of COVID-19 pandemic lockdown along with other geopolitical crises may impact economic growth India?s economic growth is still expected to become the fastest growing major economy in the world due to progressive initiatives by the Central Government. This includes regulatory reforms, investment plan propositions and budgetary support. Our Company has proven to be resilient, consistent, and sustainable in providing growth and delivering robust results.
Competition risk Our Company has worked tirelessly to maintain its competitive advantage. This has been achieved by differentiating its value proposition and we believe taking such actions continuously will ensure we remain relevant and at an advantage over the competition. Some of the actions taken to achieve this includes:
New players entering the market in addition to other organised players looking to increase market share with a rise in opportunities does pose a risk to our predicted margins and market share • Focus on the plumbing and sanitation business through enhanced credit to dealers, addition of new SKUs, and entering new markets like the North East of India
• Maintain the highest product quality standards
• Increase our network of dealers and deepen our relationship with them
• Regular and important branding exercises.
• Improved logistics networks to increase our reach
• Increased participation of on-field influencers
Input risk Within the Pipes and Fittings segment, any adverse impact of an increase in raw material prices is generally passed on to its customers, thereby protecting the Company from price fluctuations.
An increase in the prices of raw materials may impact the Company?s margins and affect our profitability
In the PVC Resin segment, Your company is affected by the volatility of prices of certain commodity chemicals (Ethylene and PVC) and intermediates (EDC and VCM). Our operations require a continuous purchase and supply of materials such as Vinyl Chloride Monomer (VCM), Ethylene and Ethylene Dichloride (EDC) for the manufacturing of PVC Resin. The prices of PVC Resin manufactured by us is monitored by Company Management and adjusted to respond to change in import parity price of PVC in the market. The market price of input and output are generally adjusted over a period of time and therefore, the Company is exposed to price variations only for a limited period.
Geographic concentration risk
There remains the risk of concentration of the business in only a few geographies which may limit our Company?s customer reach and engagement. Additionally, this may impact marketability and consumer familiarity which may impact our profitability This risk has been mitigated by the fact that Your company has established three separate plants in Ratnagiri, Pune and Masar along with a wide distribution network of dealers and retailers that cater to customers across the country including less penetrated market regions such as the North East of India.


Your company has always kept our employees at the forefront of the organisation. We realise the importance of our employees who have contributed to our company?s success and growth.

As a core element of our company, we are aware of the significance of our employees to the organisation?s long-term value generation potential and therefore, we have established an exhaustive human resources strategy that focuses on working as a team to achieve goals. To that end, our company has implemented several initiatives to help skill our employees to further enhance their productivity and increase employee engagement. We continue to dedicate resources towards the development of leadership skills and competencies to ensure employee growth within the organisation.

These initiatives have also helped in retaining our best talent while establishing the organisation as an attractive work place with an engaged and productive workforce. As of March 31, 2022, our employee strength stood at 1,379.


Your Company has positioned adequate internal control procedures proportionate to the nature of business and size of operations for the smooth conduct of business. Internal audits are conducted at regular intervals at all the plants and cover key areas of operations. These audits are independent, objective and responsible for evaluating and improving the effectiveness of risk management, control and governance processes. An Audit Committee, consisting of five independent directors and one non-independent & non-executive director, monitors the performance of the internal audits. This is conducted on a periodic basis through audit plans, audit findings and the promptness of issue resolution through follow-ups.


Your Company has well established and well documented internal financial controls which are commensurate with the nature of its business and the size and complexity of its operations. These controls form the basis of the overall framework of governance under which the Company operates. Moreover, these controls ensure the adequate safeguarding of the Company?s assets, adherence of the Company?s policies, prevention and detection of errors, accuracy and completeness of financial records along with the necessary checks and balances to ensure the smooth functioning of the organisation. The internal financial controls are reviewed periodically to ensure the effectiveness and sustenance is maintained.


In this Annual Report, we may have disclosed information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements - written and oral - that we periodically make, may contain statements that set out anticipated results based on the management?s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate?, ‘estimate?, ‘expects?, ‘projects?, ‘intends?, ‘plans?, ‘believes?, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these statements will be realised, although we believe we have been prudent in these assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any statements, whether as a result of new information, future events or otherwise except as may be required by law.