Indo Cotspin Ltd Management Discussions

41.4
(3.06%)
Dec 9, 2024|02:55:00 PM

Indo Cotspin Ltd Share Price Management Discussions

Cautionary Statement:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

Industry structure and developments:

During the period under the review, the Company had been operating in Textile activities i.e. cloth processing. The textile sector has always been an important part of peoples lives in India. The textile industry in India is one of the oldest manufacturing sectors in the country and is currently its largest. Textile machinery and accessories have been identified as core sectors under Make in India campaign The government has been pushing for indigenous production through Make in India campaign to bring down imports.

India is the worlds second-largest exporter of textiles and apparels, with a massive raw material and manufacturing base. The textile industry is a significant contributor to the economy, both in terms of its domestic share and exports. The Indian textiles industry is extremely varied, with the hand-spun and handwoven textiles sectors at one end of the spectrum, while the capital-intensive sophisticated mills sector at the other end of the spectrum. The decentralized power looms/ hosiery and knitting sector form the largest component of the textiles sector. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world. Industry faces a nonlevel playing field in many markets due to tariff barriers, however industry needs to improve its productivity levels, economies of scale and organize itself better for large production at competitive prices.

Segment-wise or product-wise performance:

The primary business of our company is manufacturing of non-woven fabric products.

The Companys main business activity is textile and its related activities which fall under single reportable segment i.e. Textiles. The Company has majorly focused on quality and production.

Nonwoven fabric is a fabric-like material made from long fibres, bonded together by chemical, mechanical, heat or solvent treatment. The term is used in the textile manufacturing industry to denote fabrics, such as felt, which are neither woven nor knitted. Nonwoven materials typically lack strength unless densified or reinforced by a backing. In recent years, nonwovens have become an alternative to polyurethane foam.

Nonwoven fabrics are engineered fabrics that may be a have a limited life, single-use fabric or a very durable fabric. Nonwoven fabrics provide specific functions such as absorbency, liquid repellence, resilience, stretch, softness, strength, flame retardancy, wash ability, cushioning, thermal insulation, acoustic insulation, filtration, use as a bacterial barrier and sterility. These properties are often combined to create fabrics suited for specific jobs, while achieving a good balance between product use-life and cost. They can mimic the appearance, texture and strength of a woven fabric and can be as bulky as the thickest paddings. In combination with other materials, they provide a spectrum of products with diverse properties, and are used alone or as components of apparel, home furnishings, health care, engineering, industrial and consumer goods.

A large number of fibers are available in the market, but the Nonwovens market is mainly dominated by three fibers, namely polyolefins, polyester, and rayon. These three fiber types make up a substantial part of the 2023-24 overall Nonwovens markets for fibers.

Nonwovens find numerous applications ranging from baby diapers to industrial high-performance textiles. Some of the important areas where nonwovens are treated as primary alternative for traditional textiles as Geotextiles, materials for building, thermal and sound insulating materials, hygienic and health care textiles and automotive industries. Nonwovens are also used in cover stocks, agriculture, aerospace, home furnishings etc.

With the nonwovens successfully moving into more technical end-uses, the fiber requirements have also become more important with regard to the fiber properties. The cooperation between fiber supplier and fabric producers is now seen as important criteria for more advancement to come about in the nonwovens field.

Business:

Incepted in the year 1995, the Company is one of a significant player in Non-Woven Products such as Non-Woven Fabrics, Non-Woven Carpets, Non-Woven Felts, Non-Woven Designer Carpets, Tufted Carpets and many others Textiles Products.

Product Range:

Non-Woven Fabrics

Non-Woven Carpets

Non-Woven Felt

Non-Woven Designer Carpets

Non-Woven Geo Textiles

Tufted Carpets

Factory Location:

The Company has its manufacturing plant located at Delhi Mile Stone 78 K.M, G.T, Road, NH-44, Village Jhattipur, Post Box No. 3, Post Office, Samalkha, Panipat-132103(Haryana) India.

Our Quality:

Maintaining high quality standards in every stage of business is the trademark of our company. We do obey quality dimensions from the beginning of collecting raw materials to delivering the products. Exporting premium quality of products is the hallmark of our corporate entity.

For manufacturing the products, our production team normally uses pp, polyester staple fiber as the raw materials. Our export quality inspection team is well equipped with our in-house latest tools and techniques as well. We usually import products like latex chemicals, textile material and stock lots of textiles, etc.

Infrastructure:

Our well-arranged infrastructure includes expert manufacturing team and experienced production unit. Here, our engineers use several equipments like raw material processing machines, designing machines, quality checking machines and many useful tools.

We also have high-tech lab, quality control room, site office in order to strengthening our business. We make different design of carpet items at affordable price, so that customers from across the world get

Product wise performance:

Product wise performance of the Company has been mentioned in the attached balance sheet of the Company.

Opportunities & Threats:

The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. The new age Indian consumer, the organized retail potential, which is creating the huge consumption opportunity, is by far the biggest Opportunity for companies like us. With the aspirational and rich class in India having a better penetration, our product led growth will help the company in both the immediate and long run. Also, with the rural India being revisited by marketers through the modern retail philosophy, the opportunity is huge.

Competition from Indian and global players remain a matter of concern and probable threat; while the company is well prepared to tackle such issues on an ongoing basis.

Risks & Concern:

There is stiff competition in the Non-woven fabrics market with new national and international entrants. On a macro level business continues to be impacted by changes in Government Policy and International Markets.

i. Factors that may affect results of operations

ii. Fluctuation and increase in raw material prices.

iii. Non-availability of raw material and other resources

iv. Supply of Power

v. New Competitive products

vi. Government rules and regulations relating to Textiles Industry

vii. Any slowdown in the economic growth in general in particular

The Company continues to follow a suitable strategy to modify its risk profile by eliminating and significantly reducing key business risks.

Outlook:

The Company is continuously trying to accomplish the desired results. The Company will achieve more turnovers by various marketing strategies, offering more quality products, launching new products etc. in coming years followed by increase in profit margin by way of various cost cutting techniques and optimum utilization of various resources of the Company.

Human resource / Industrial relations:

The Company believes that the human resources are vital in giving the Company a competitive edge in the current business environment. The Companys philosophy is to provide congenial work environment, performance-oriented work culture, knowledge acquisition / dissemination, creativity and responsibility. As in the past, the Company has enjoyed cordial relations with the employees at all levels. The Company continues to run an in-house training program held at regular intervals and aimed at updating their knowledge about issues Internal Control Systems and Adequacy. The Companys operating and business control procedures ensure efficient use of resources and comply with the procedures and regulatory requirements. There are adequate internal controls to safeguard the assets and protect them against losses from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly. The Audit Committee periodically reviews the internal

Details of significant changes (i.e. Change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor:

Particulars

Financial Year 2023-24 Financial year 2022-23

Debtors Turnover

28.62 8.37

Inventory Turnover

16.72 8.76

Interest Coverage Ratio

9.50 9.34

Current Ratio

4.79 1.68

Debt Equity Ratio

0.01 0.01

Operating Profit Margin (%)

5.26% 3.95

Net Profit Margin (%)

0.38% 2.11

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