1. INDUSTRY STRUCTURE AND DEVELOPMENTS
Although the pandemic had largely receded by the onset of year 2022,
the ill-effects of the geopolitical tensions arising out of Russia-Ukraine war was evident
across the global economies. Further, the emergence of inflationary pressures posed to the
global economic growth. All major central banks were seen raising their policy rates in
order to significant combat inflation. In India, Reserve Bank of India (RBI) too followed
suit and raised the policy repo rate six times between May
2022 to February 2023, from 4 per cent to 6.5 per cent. Consequently,
the lending and borrowing rates moved up posing hurdles to the domestic growth prospects.
As per latest data released by National Statistical Office (NSO), the growth in real
GDP during 2022-23 is now estimated at 7.2 per cent as compared to 9.1
per cent in 2021-22 (provisional estimates of national income, 2022-23, NSO, dated 31st
May, 2023). Growth was supported by a visible pick-up in the services sector.
Manufacturing sector underperformed due to high raw material costs and uneven demand
recovery which pulled down the overall growth.
The first Union Budget of the Amrit Kaal, Union Budget 2023-24,
outlined its focus on housing and urban infrastructure sectors. In the budget, capital
investment outlay for infrastructure has been increased steeply by 33 per cent to 10 lakh
crore, which is 3.3 per cent of GDP. States and cities will be encouraged to undertake
urban planning reforms and actions to transform cities into ‘sustainable cities of
tomorrow. Through property tax governance reforms and ring-fencing user charges on
urban infrastructure, cities will be incentivized to improve their credit worthiness for
municipal bonds. Further, like the Rural Infrastructure Development Fund (RIDF), an Urban
Infrastructure Development Fund (UIDF) will be established through use of priority sector
lending shortfall which will be managed by the National Housing Bank and will be used by
public agencies to create urban infrastructure in Tier 2 and Tier 3 cities. The outlay for
PM Awas Yojana has been enhanced by 66 per cent to over
79,000 crores (Union Budget speech 2023-24).
2. STRENGTHS AND WEAKNESSES
HUDCO is a Schedule-A Mini Ratna, CPSE with 53 years of standing as a
premier techno-financial and urban development sector. It operates pan-India through a
network of 21 regional offices and 11 development offices. The
Company has been funding a wide array of housing and urban
infrastructure projects ranging from EWS/LIG housing to water supply, sanitation, roads,
bridges, airports and to even metro rail. In its course of business over the years, the
Company has established a long-standing association with the various state government
agencies and its parastatals such as Development Authorities, Housing Boards, Urban Local
Bodies, Water Supply & Sewerage Boards, Roads & Bridges Development Corporations,
etc., throughout the country. HUDCO has a human resource base of multidisciplinary
professionals from various fields like Finance, Law, Architecture, Civil Engineering,
Urban & Regional Planning, Information Technology, Economics,
Human Resources and Public Relations, etc. HUDCO has its own Training
& Research Institute, the Human Settlement Management Institute (HSMI) for research
activities as well as training & capacity building of inhouse as well as outside
professionals of the housing and urban development sector.
Some of the key weaknesses being faced by the Company include:
inadequate access to low-cost sources of funds; restrictions in exposure/credit
concentration norms; and difficulties in getting State Government guarantee/budgetary
support, which pose challenges for expansion of business.
3. OPPORTUNITIES, THREATS, RISKS AND CONCERNS
The key to HUDCOs growth prospect is crucially linked to the
urbanisation trend of the Country. Indias urban population is estimated to increase
from 470 million in 2021 to 600 million by 2036 which would constitute about 40 per cent
urbanisation level, up from 31.2 per cent in 2011 (World Bank Report 2022). The World Bank
Report also estimated that Indias cities require a capital investment of USD 840
billion in urban infrastructure and municipal services till 2036 in 2020 prices. Further,
as per National Infrastructure Pipeline (NIP) Report, total capital expenditure
requirement in infrastructure sectors in India during fiscals 2020 to 2025 is projected at
about 111 trillion, including 19.19 trillion for urban infrastructure projects. Thus,
with continuous rise in the urbanisation levels and commensurate increase in capital
investment requirement, HUDCOs potential for quantum jump in business operations
augurs well, particularly in view of its impending operational transition from HFC to
NBFC-IFC (Infrastructure Finance Company) in the new RBI regulatory regime. However, HUDCO
has to increasingly contend with its competitors from Banking Sector and other Financial
Institutions who have relatively cheaper sources of funds. This poses stiff competition to
HUDCOs business and pressure on the margins.
4. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
During the year under review, HUDCO operates only in one segment and
has no other reportable segment, hence, segment wise performance, has not been given.
5. OUTLOOK
Amidst the heightened global economic uncertainty, where the global
growth is likely to bottom out at 2.8 per cent in 2023-24, (as per IMF-World Economic
Outlook Report, April 2023), India remains a ‘bright spot with the highest
growth rate of 5.9 per cent in 2023-24 and is likely to grow at 6.3 per cent in next
fiscal. Further, as per RBIs latest monetary statement, the GDP growth is likely to
be 6.5 per cent this fiscal on the back of supportive domestic demand conditions. This
shows the New Indias continued resilience and strong macro - economic fundamentals,
which also drive the global growth.
One of the key reasons for Indias sustained growth is the huge
impact of investment in real estate sector on the economic growth with its strong income
and employment multiplier effects through ‘forward and ‘backward
linkages with other industries in the economy. The Govt. of Indias focus on
‘infrastructure-led economic growth is further going to provide significant
impetus for economic growth.
V arious available data and Reports, such as World Bank Report, NIP
Report, etc., point towards a sustained increase in urbanisation level and consequent
increase in investment in housing and urban infrastructure sectors. This factor is the key
driver to HUDCOs business growth. Further, the government has been undertaking
various policy measures for orderly & sustainable urbanisation and catalysing
steadyflowof investments into the housing and urban infrastructure sector. These imply
that the long-term business outlook for the Company is reasonably good. Despite the
current global economic uncertainty with high interest rate regime, the Company is well
poised to navigate through this uncertain environment in the short to medium term for a
sustained business growth through necessary product & process innovation. The Company
is also fully geared up to reinforce its support to all GoI flagship programmes/Missions
ranging from financing to appraisal, monitoring, and capacity building support. The future
holds good tiding for HUDCO.
6. INTERNAL CONTROL SYSTEM AND ITS ADEQUACY
HUDCOs Internal Control Systems with reference to its Financial
Statements is adequate and commensurate with the nature, size, and complexity of its
operations. The detail with respect to Internal Control Systems has been given in the
Directors Report.
7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO
OPERATIONAL PERFORMANCE
The details of financial performance with respect to operational
performance has been explained in the Directors Report. In preparation of financial
statements, the Company has followed Indian Accounting Standards notifiedunder the
Companies
(Indian Accounting Standard), Rules, 2015 (as amended) with effect from
1st April, 2018 issued by the Ministry of Corporate Affairs.
Information pursuance to schedule-V of SEBI (LODR) Regulations 2015
- There is no significant
25% or more as compared to the immediately previous financial year) in
key financialratios viz. Debtors Turnover Ratio (not applicable to HUDCO being a HFC),
Inventory Turnover Ratio (Not applicable to HUDCO being a HFC), Interest Coverage Ratio,
Current Ratio (Not applicable to HUDCO being a HFC and due to maintenance of Accounts as
per IndAs), Debt-Equity
Ratio, Operating profit margin and Net profit margin during the year
2022-23 as compared to the previous year 2021-22. The return on net-worth during the year
2022-23 is 11.02 % as against the 11.86 % during the previous year 2021-22 resulting in
insignificant decline (0.84 %) over the previous year due to. marginal decreaseinthe
profitaftertax
8. MA TERIAL DEVELOPMENT IN HUMAN RESOURCES, INDUSTRIAL
RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED
HUDCO has been a front-runner in the area of human resource management.
The guiding principle of HUDCOs Human Resource Management Policy is to ensure
availability of competent, motivated, and effective workforce to facilitate achievement of
its full potential at all times to achieve organizational goals. Your Company has
workforce of 214 women employees which constitutes 31.79% of its total strength.
Representation of women employees have gone across various hierarchical levels in the
Company. As on 31st March, 2023, HUDCO has a workforce of 673 employees. The
category wise details along with percentage of employees are as under:
Group |
General |
SC |
ST |
OBC |
Ex-Serv. |
PwD |
Total |
| A |
357 |
88 |
32 |
69 |
0 |
10 |
556 |
| B |
6 |
1 |
1 |
4 |
0 |
0 |
12 |
| C |
14 |
7 |
5 |
4 |
0 |
1 |
31 |
| D |
31 |
22 |
11 |
7 |
1 |
2 |
74 |
Total |
408 |
118 |
49 |
84 |
1 |
13 |
673 |
9. ENVIRONMENTAL PROTECTION AND CONSERVATION, TECHNOLOGICAL
CONSERVATION, RENEWABLE ENERGY DEVELOPMENT, FOREIGN EXCHANGE CONSERVATION
Y our Company is not engaged in any manufacturing activity, hence,
therearenosignificantparticulars, relating to environmental protection and conservation,
technological conservation, renewable energy developments, etc. HUDCO encourages projects
which are environmentally safe and secure and have taken various initiatives in the
direction on a continuous basis. The particulars with regard to foreign exchange earnings
and outgo are given in the Directors Report.
10. CORPORATE SOCIAL RESPONSIBILITY
The status report on Corporate Social Responsibility for the year
2022-23 has been given in the Directors Report and Annual Report on CSR activities,
annexed with the Directors Report.
11. CAUTIONARY STATEMENT
All the statements in the Management Discussion & Analysis Report
with regard to projections, estimates and expectations are forward looking statement,
based on certain future assumptions and expectations, which could vary from the actuals
envisaged. The Company assumes no responsibility in any way to modify or revise such
statements based on subsequent events or developments
|
For and on behalf of the Board of
Director |
|
Sd/- |
|
Kuldip Narayan |
Place : New Delhi |
Chairman & Managing Director |
Date : 22nd August, 2023 |
|
|
(DIN: 03276525) |
+91-9892691696
