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Hindustan Adhesives Ltd Management Discussions

316
(0.05%)
Oct 17, 2025|12:00:00 AM

Hindustan Adhesives Ltd Share Price Management Discussions

(As per Regulation 34 of the SEBI Listing Regulations) INDUSTRY AND OUTLOOK:

The Company is the largest integrated producer of Carton Sealing Tapes in the country and having production facilities for making BOPP Adhesive Tapes with both Acrylic and Hot-Melt technology. It also has its own adhesive making facility along with facilities for making paper cores and cartons in-house, besides multiple printing equipments, slitting and spooling facilities to make many value added import substitute products for both the domestic and international markets. The Company also produces many types of specialty tapes like Filament Tapes, Carry Handle Tapes, Tear Tapes, Tamper evident Tapes and many more.

OPPORTUNITIES AND THREATS:

With the focus towards becoming a leading International supplier of its products and with our efforts in supporting the vision of the Honorable Prime Minister of India for "Atmanirbhar Bharat", as also for Make in India and supply to the world, the Company has ample opportunities to utilize full capacities for production of Self Adhesive Tapes and be able to focus on building its Brand and Image as a quality supplier of Adhesive Coated Products globally.

Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Companys operations include economic conditions affecting demand- supply and price conditions in the markets in which the Companys operates, raw material availability and its prices, changes in the Governmental regulations, labour negotiations, tax laws and other statues and economic development within India.

RISKS & CONCERNS:

The Company is taking proactive steps in implementing management principles well adapted to the demands of the changing environment. The company has the policy of assessing the risk and managing the business. The company is operating on a well defined plan and strategy; hence we are equipped to face any change in regulatory risk.

Further there is fire at Roorkee Plant and there is loss of plant and machinery due to fire amounting Rs 212.85 Lacs but the management informed that the entire building and depleted balance machinery have been insured at reinstatement values, and we are hopeful of recovering the total estimated loss. There is no significant loss of goods as the company had stopped production since May 2024, as already intimated to the BSE. The insurance surveyor has already surveyed the premises, and due to the procedural time required, Company are hopeful of getting the claim settled in the current financial year without any financial loss to the company.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has a well placed proper and adequate internal control system commensurating with the size and nature of its business. The Board has appointed Internal Auditors to strengthen the internal control system.

The primary objective of the internal control system is to ensure that all its assets are safeguarded and protected and prevent any revenue leakage and losses to the Company. The Company has proper system of checking and/or review of functioning of the employees. The present reporting structure ensures independence of the internal audit function and embodies best corporate governance practices.

FINANCIAL PERFORMANCE:

Please refer Directors Report for financial performance of the company. Segment/product wise performance is not applicable to the company.

HUMAN RESOURCE DEVELOPMENT:

The company has focus to retain its manpower by providing good working conditions thereby reduce turnover ratio.

SIGNIFICANT FINANCIAL RATIO

Particulars Formula 2024-25 2023-24 % change Reason for change
(a) Current Ratio Current Assets/Current Liabilities 1.08 0.97 10.32% Increase in current assets relative to current liabilities
(b) Debt-Equity Ratio Total debt/Shareholders Equity 0.97 0.80 21.68% Additional Borrowings
(c) Debt Service Coverage Ratio Net Operating Income/ Debt Service 6.07 6.52 -6.91 % Operating income decreased
(d) Return on Equity Ratio Net Income/ Shareholders Equity 17.73 21.62 -18.00% Decline in Net Profit
(e) Inventory turnover ratio COGS/Average Inventory 4.08 4.81 -15.358 Higher stock holding.
(f) Trade Receivables turnover ratio Net credit Sales/ Ave. Trade Receivable 9.19 9.25 -0.58% No Significant Change
(g) Trade payables turnover ratio Net credit purchase/ Ave. Trade payable 3.53 11.44 -69.16% Increase in suppliers longer credit period
(h) Net capital turnover ratio Net Sales/Avg Working Capital 354.94 -290.63 –222.13% Effective use of Working Capital
(i) Net profit ratio Net profit/Total Revenue 4.99 5.39 -7.55% Decline in Profit
(j) Return on Capital employed EBIT/Capital Employed 21.18 29.43 -28.02% Lower EBIT
(k) Return on investment Income earn on Investment/ Value of the Investment NA NA NA NA

DISCLOSURE OF ACCOUNTING TREATMENT:

In preparation of the financial statements, the applicable provisions of Companies Act, 2013, Indian Accounting Standards and other applicable Laws have been strictly adhere to. The Financial Statements of the Company along with the notes are further discussed in this Report

Madhusudan Bagla
Managing Director

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