Hawa Engineers Ltd Management Discussions.


Pursuant to amendment made in Schedule V to the SEBI Listing Regulations, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of the Company (on standalone basis) including explanations therefore are given below:

Particulars F.Y. 2018-19 F.Y. 2017-18 % Changes
1 Operating Profit Margin 5.63 4.89 15.13
2 Net Profit Margin 2.07 2.61 -20.69
3 Return on Net Worth 5.59 7.88 -29.06
4 Debtors Turnover 7.04 5.90 19.32
5 Inventory Turnover 5.62 6.20 -9.35
6 Interest Coverage 1.58 1.87 -15.51
7 Debt / Equity 6.57 7.24 -9.25
8 Current Ratio 1.71 1.66 3.01

Return on Net worth ration is decreased due to decreases in total income.


Valves are used to control or divert the flow of liquids, gases, slurries, dry material or steam in all types of industries. They are also used to control or isolate the rate of flow volume, pressure, direction or a combination of these parameters. There are only two known ways of controlling the flow of liquids and gases, and all valves are based on one of the two principles. Your Companys primary business is the design, manufacture and sale of Industrial valves, valve cores and accessories.

According to the recently published report by TechSci Research, "India Industrial Valves Market Forecast & Opportunities, 2020", Indias industrial valves market is largely dominated by organized manufacturers and is expected to witness double digit growth at a CAGR (Compound Annual Growth Rate) of 13% till 2020. The growth in this region will be driven mostly by new infrastructure and heavy industrial spending. More power plants will be built in this region in the next five years than in the rest of the world combined. Industrial valves market is being driven by increasing demand for valves in oil & gas, chemical and municipal applications. The market is expected to grow at a CAGR of 5.4% between 2014 and 2019. Therefore, with an expected growth in the oil and gas, power, pipeline, steel, infrastructure, petrochemicals and pharmaceutical industries, the demand for valves are also expected to gather steam. Valve companies are finding many new opportunities for their products. Applications with double-digit growth include ethanol, LNG, desalination, and biotechnology. Alternative fuel sources including oil sands, oil shale and coal liquefaction also represent promising markets.

The Global Process industry is growing at a rapid rate, which in turn is creating more opportunities for the Indian Industrial Valve market. Thus the demand for industrial valves increases along with the growth of the Process industries.


Although the general economic environment is not conducive for strong growth, your Company has a competitive advantage in the market due to its superior technology, large installed capacities in all product categories, high quality products, competitive pricing etc. The market scenario in India is likely to continue to be subdued in the year ahead. Under these circumstances, payments from some customers can tend to be delayed. This can adversely affect cash-flows and can put an additional interest burden on the Company due to increased utilization of working capital. The primary raw materials used in manufacturing valves are highly volatile commodities, namely brass which is a Carbon Steel, Alloy Steel & Stainless Steel. Continued volatility in the prices of these commodities can pose a threat to profitability.

The Companys continued emphasis on technology-based investments would enable the Company to meet the competitive environment by way of productivity enhancement and cost reduction measure.


There is no segment in the company.


Indian valve industry has come a long way from making simple valves to producing a wide range of sophisticated precision valves. But the Indian valve space is as fragmented as the Global Valve Industry. Most of the industry is dominated by small and medium scale players with heavy dependence on sub contractors and a large part of the market consists of the unorganized sector.

The pumps and valves market in India provides an opportunity of Rs. 17,500 crore and is expected to grow at an annual rate of 7 to 10 per cent over the next few years. The new government in the centre is expected to take policy initiatives that will help the Indian industry.


Apart from the normal business risk, no major risk is foreseen.


The Company has proper and adequate systems of internal controls. Internal audits and checks are carried out at regular intervals. An audit committee, headed by an Independent Director, reviews control systems and their adequacy.


The details of the financial performance of the Company appear in the Balance Sheet, Statement of Profit and Loss and other Financial Statements. Highlights for the year 2018-19 are as under:

Particulars Year Ended Year Ended
31/03/2019 31/03/2018
Revenue from Operations 50,50,26,568 55,18,81,620
Other Income 45,70,919 32,99,444
Profit/loss before Depreciation, Finance Costs, Exceptional items and Tax Expense 3,76,60,384 3,68,32,394
Less: Depreciation/ Amortisation/ Impairment 92,06,138 90,14,792
Profit /loss before Finance Costs, Exceptional items and Tax 2,84,54,246 2,78,17,602
Less: Finance Costs 1,79,82,566 1,29,52,333
Profit /loss before Exceptional items and Tax Expense 1,04,71,680 1,48,65,269
Add/(less): Exceptional items 0 0
Profit /loss before Tax Expense 1,04,71,680 1,48,65,269
Less: Tax Expense (Current & Deferred) 31,15,712 50,91,611
Profit /loss for the year (1) 73,55,968 97,73,658
Total Comprehensive Income/loss (2) 0 0
Total (1+2) 73,55,968 97,73,658
Balance carried forward 9,63,18,643 8,88,33,428

The financial performance of the Company has been explained in the Directors Report of the Company for the financial year ended 31st March 2019 appearing separately.


Human Resources are a key focus area of the Company. The Company endeavors to attract and develop the best talent available in each area of its operations. The Companys policy is to create a conducive environment for nurturing talent and developing the requisite skills needed to keep pace with the ever-changing needs of the market. Training is imparted to employees at all levels and covers both technical and behavioral aspects.

The Industrial Relations scenario during the year under review was smooth. The Company has an excellent track record in this regard and has maintained cordial relationships with all its employees.


Certain statements in the Management Discussion and Analysis describing the Companys views about the industry, expectations, objectives, etc. may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement. Factors like supply and demand situations, input prices and their availability, changes in Government regulations, economic developments, etc. may influence the Companys operations or performance.

For and on behalf of the Board of Directors
Aslam Kagdi
Place : Ahmedabad Chairman and Managing Director
Date : 27th May, 2019 DIN: 00006879