Guj. Ambuja Exp Management Discussions


The global economy bounced back strongly in 2021 despite the COVID-19 pandemic, but in 2022, it faced new challenges such as rising fuel and input costs, geopolitical tensions in

Europe, and increasing interest rates worldwide to combat inflation. These issues led to higher production costs, which resulted in higher prices for goods and services, causing global inflation to peak at 8.80%. This led to concerns among central banks worldwide, resulting in a tightening of monetary policy, higher interest rates, and increased volatility in financial markets.

Global Forecast Summary

Global Growth



(% change Y-o-Y) 2021 2022 2023 2024
World Output 6.3 3.5 3 3
US 5.9 2.1 1.8 1
Euro Area 5.3 3.5 0.9 1.5
China 8.4 3 5.2 4.5
Japan 2.2 1 1.4 1
UK 7.6 4.1 0.4 1
Advanced Economies 5.4 2.7 1.5 1.4
Emerging Market and Developing 6.8 4 4 4.1

Leading agencies have predicted a decrease in world trade growth in 2023, with a subsequent recovery in 2024, in line with global demand. These predictions are based on various assumptions, such as the lower costs of fuel and non-fuel goods since October 2022, as well as increased tightening of policies by major central banks.

According to the World Economic Outlook, January 2023, by the International Monetary Fund (IMF), According to the World Economic Outlook, July 2023 published by the International Monetary Fund, global growth is projected to fall from an estimated 3.5 % in 2022 to 3.0 % in both 2023 and 2024. Upside inflation surprises have been most widespread among advanced economies, with greater variability in emerging markets and developing economies. As a result, advanced developed economies are expected to account for nearly three-quarters of global GDP growth in 2023.

Food Processing Industry

The global food processing market was valued at USD 3.18 Trillion in 2022 and is expected to expand at a CAGR of 3.5% during the forecast period, reaching USD 3.92 Trillion by 2028. The global food processing sector transforms raw agricultural products into finished food products ready for consumption.

It is a crucial component of the food industry and plays a vital role in meeting the nutritional needs of the growing global population. The sector includes activities such as meat, dairy, fruit and vegetable, cereal processing, and bakery and confectionery production. The food processing sector presents opportunities for innovation and growth, particularly in the areas of health and wellness, convenience, and sustainability.

(Source: The Indian food processing industry is a significant contributor to the countrys economy. The industrys market size was Rs. 25,455 Billion in 2022, and is expected to register a CAGR of 9.05% during the period of 2023-2028, reaching Rs. 45,345 Billion by 2028.

The Ministry of Food Processing Industries (MOFPI) is in charge of creating schemes and enforcing regulations pertaining to the food processing industry in India.

Grain, sugar, edible oils, drinks, and dairy products are the major business areas of Indias food processing industry.

With changing consumer preferences and increasing demand for processed and packaged food products, the food processing industry in India is expected to grow significantly. (Source:


Gujarat Ambuja Exports Limited (herein, referred to as ‘GAEL or ‘The Company) is a prominent Indian agro-processing company with an industry presence of over 30 years. The Company specialises in producing maize products, cotton yarn, and edible oils catering to the food, pharmaceutical, and feed industries both domestically and globally. GAEL operates through four business segments, namely agro-processing, cotton yarn, Renewable power, and others.

The agro-processing segment involves the processing and export of agricultural commodities such as soybean, cottonseed, maize, and other agricultural commodities. GAEL also manufactures corn starch derivatives, soya derivatives, feed ingredients, and edible oils GAEL is ok with “to cater to” the food, pharmaceutical, and feed industries.

Apart from its agro-processing operations, GAEL also produces yarn. The Company has set up wind and Solar power plants in Gujarat, Madhya Pradesh and Maharashtra, with a total capacity of 10.45 MW.

With nine manufacturing facilities across India, GAEL exports its products, including cotton, soybean, maize, and castor seeds, as well as corn starch derivatives, soya derivatives, feed ingredients, and edible oils, to more than 100 countries worldwide, including USA, Canada, and Europe. In terms of financial performance, GAEL reported a gross turnover of Rs. 4909 Crores in FY 2022-23. On the exports front, the Company recorded a turnover of Rs. 1545 Crores in FY 2022-23 against Rs. 1138 Crores in FY 2021-22.


The success of the Companys maize processing segment is a crucial factor driving its growth and expansion in the domestic market. The integrated operations provide logistical convenience and valuable synergies. The Company is continuously expanding to meet customer demand and remains a consistent supplier of agro-ingredients. The

Companys expertise gives them a competitive edge in the market, and their strategic location in proximity to raw . materials,makestheiroperationsmoreefficient

Particulars FY 2022-23 FY 2021-22
Domestic Turnover 2045 1,689
Exports Turnover 1158 955
Total Turnover 3203 2,644
EBIT 438 549
Cash Profit 511 623
Cash Profit (in %) 16% 24

Agro-Processing processingGAEL is a significant industry, with a focusonquality,innovation, andsustainability. role in Indias renewable energy sectors

The Company produces and exports cotton yarn, maize, soya, wheat, and edible oils. Its agro-processing segment has two manufacturing operations - oil seed crushing and edible oil refining. On one hand, the oil seed crushing operation has expanded due to favourable monsoons, decreased seed prices, and high export demand. On the other hand, the downstream operation of edible oil refining has decreased due to factors, such as crop damage caused by prolonged monsoons, rising seed prices, and a less competitive environment in the export market.

Particulars FY 2022-23 FY 2021-22
Domestic Turnover 1278 1,592
Exports Turnover 386 183
Total Turnover 1664 1,775
EBIT 39 146
Cash Profit 44 153
Cash Profit (in %) 3% 9


GAELs Spinning segment contributes to comparatively lower revenue and a reduced share to the Companys overall turnover. It constitutes only a minor fraction and the

Company has been maintaining a consistent production of 42 TPD of yarn with a manufacturing facility capacity of

65,520 spindles. Even across this segment, GAEL continues to mark its presence by conducting eco-friendly and pollution-free operations.

Particulars FY 2022-23 FY 2021-22
Domestic Turnover 33 237
Exports Turnover 0 6
Total Turnover 33 243
EBIT (18) (4)
Cash Profit/(Loss) (12) 6
Cash Profit (in %) (34) 2

Renewable Energy

GAELs commitment to reducing its carbon footprint and contributing to a green environment is evident through the business renewable energy segment. Herein, it focusses on developingandoperatingwindpowerprojects.TheCompanys wind farms in Gujarat have a total installed capacity of 8.45

MW and Solar Power of 1 MW of each in Madhyapradesh and Maharashtra contributed significantly to its revenue. In addition to wind power, GAEL has undertaken various initiatives to install biogas engines, biomass-based boilers, and other energy-saving equipment at its manufacturing units, and has captive power plants at all its units. With its focus on sustainable energy sectors, GAEL aims to play a significant and development.

Particulars FY 2022-23b> FY 2021-22
Domestic Turnover 9 9
Exports Turnover - -
Total Turnover 9 9
EBIT 5 5
Cash Profit 7 7
Cash Profit (in %) 85 83


The Companys operational revenue was registered at

Rs. 4909 Crores as compared to Rs. 4,670 Crores recorded in the previous financial year.

Financial Overview based on on the Companys consolidated Keyfinancial financial statement.

Particulars FY 2022-23 FY 2021-22
Debtors Turnover Ratio 20 21
Inventory Turnover Ratio 7 7
Interest Coverage Ratio 34 113
Current Ratio 3.87 2.91
Operating Profit Margin (%) 11 16
Net Profit Margin (%) 7 10
EBIT Margin 9 14
Return on Networth 14.45 25.07
Debt to Equity 0.09 0.13

Key financial highlights based on the Companys standalone financial statement

Particulars FY 2022-23 FY 2021-22
Income from Operations 4,983 4,724
EBIT 454 644
EBITDA 549 741
PBT 441 638
PAT 330 475
Particulars FY 2022-23 FY 2021-22
Depreciation 95 97
EPS 14 21
Material Cost 3285 2,626
Employee Benefit Expenses 121 148
Particulars FY 2022-23 FY 2021-22
Other Expenses 766 614
Shareholders Fund 2,443 2,127
Non-Current Liabilities 78 73
Current Liabilities 440 563
Non-Current Assets 1,259 1,126
Current Assets 1,701 1,638

Risk Management & Concerns

Running a successful business involves navigating a range of risks and uncertainties. GAEL understands the importance of identifying and managing these risks to ensure long-term sustainability and growth. An overview of the key risks identified and analysed by the Company in the current year is presented in the following table. By proactively managing these risks, GAEL continues to deliver value to its customers, shareholders, and other stakeholders.

Risk Impact Mitigation
Competition Risk Competition in the agro-processing and export industry can impact the Companys market share and pricing power. A strong focus on maintaining high-quality standards, developing strong relationships with customers and suppliers, and investing in research and development enables the Company to stay ahead of the competition.
Credit Risk The risk of non-payment or default by customers or suppliers can affect the Companys cash flows and profitability. A rigorous credit risk assessment process at GAEL is in place to evaluate the creditworthiness of its customers and suppliers. It also has a strong credit monitoring and collection mechanism to ensure timely payments.
Technology Risk Technological disruptions or failures can impact the Companys operations and supply chain. Investment in technology infrastructure enables GAEL to ensure that its operations are resilient to technological risks. It also has a strong disaster recovery and business continuity plan in place to minimise the impact of any technological disruptions.
Environmental Risk Climate change, water scarcity, and other environmental factors can impact the Companys supply chain and operations. Implementation of sustainable practices across GAELs business operations, such as water conservation, renewable energy adoption, and waste management, helps to mitigate this risk. It also collaborates with suppliers to ensure that they adopt sustainable practices. This helps to minimise the Companys exposure to environmental risks.
Fluctuations in Company. Commodity Prices Volatility in commodity prices can affect the profitability A risk management strategy has been implemented at GAEL to hedge against commodity price fluctuations by using derivatives, entering into forward contracts and options contracts, and maintaining healthy inventory levels.
Currency Risk Currency fluctuations can impact the Companys revenue and profitability, particularly in the case of exports. Hedging mechanisms like forward contracts and options contracts are undertaken by the Company to mitigate currency risk.
Regulatory Changes Changes in Government policies, rules, and regulations could have a negative impact on the Companys operations. The regulatory environment is monitored actively and the Company adapts its operations accordingly. It has a strong compliance programme in place to ensure adherence to all relevant regulations and standards.
Supply Chain Disruptions Disruptions in the supply chain, including logistics, transportation, and warehousing, could affect the Companys ability to deliver products to customers. Various measures are undertaken by the Company to enhance its supply chain resilience, including multi-sourcing of raw materials, improving warehouse management, and leveraging technology to optimise logistics operations.
Natural Calamities Natural disasters such as floods, droughts, and earthquakes can affect the Companys operations and supply chain. A comprehensive disaster management plan has been implemented to minimise the impact of natural calamities. The Company has invested in infrastructure to improve its ability to manage natural disasters and minimise disruption to its operations.

Internal Control Systems and their Adequacy

GAEL and its Management have established robust Internal Control systems to ensure the accuracy of financial reporting and protect against potential losses or unauthorised use of assets. These controls help in the optimal utilisation of the Companys resources while also ensuring that transactions are properly authorised, recorded, and reported to the Management. The Company continually improves and tests its internal controls to ensure the effectiveness of Management and operating procedures. It adheres to accounting standards and guidelines for maintaining books of accounts and financial statement reporting.

To assess the effectiveness of internal controls, independent internal auditors are appointed to conduct risk-based audits throughout the year. The Audit Committee of the Board of

Directors receives a summary of the auditors observations, and thereon, the necessary corrective measures are undertaken on a prompt basis. Internal control systems are designed to keep a check on operational efficiencies, adherence to applicable laws and regulations, and the reliability of financial reporting.

Human Resources

The Company recognises the importance and strategic value of its human capital as well as the cultural diversity and dignity of all employees, regardless of their position. It prioritises employee empowerment to achieve organisational effectiveness and fosters a corporate environment that promotes self-motivation and teamwork. The Company has successfully created a motivated workforce through regular upskilling and training programmes, incentivising superior performance, and building a creative workplace. It is committed to being an employer of choice, building an inclusive culture, and maintaining a strong talent pipeline through progressive employee relations policies. The Management invests in people through training programmes to keep employees competent and up-to-date with the changing business environment. All levels of employees receive continuous training and development, and industrial relations remain cordial. As of March 31, 2023, the Company had 2,435 employees on its payroll.

Cautionary Statement

Statements in the Management Discussion and Analysis

Report describing the Companys projections, estimates and expectations may be interpreted as ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to its operations include economic conditions affecting demand/supply, price conditions in the domestic and international markets in which it operates, and changes in Government regulations, tax laws, and other statutes. The Company assumes no responsibility to publicly amend, modify, or revise any ‘forward-looking statements based on any subsequent development, information, or events.