An Economic Overview
World Economy: IMF projected the global economy to have a soft landing amid high
uncertainties in 2022. In their April 2023 World Economic Outlook, the agency hinted at
GDP growth of 3.4% in CY22. Amid the hopes of a strong rebound, the year witnessed a
series of severe shocks, namely a war in Ukraine, significant supply-chain disruption due
to the war, food and energy crises, surging inflation, debt tightening and much more.
Amid high inflation, trade in goods and services showed a positive uptick owing to the
strong global demand. The trade in goods jumped 10% on a y-o-y basis to approximately $25
trillion, whereas services grew 15% to $7 trillion.
Towards the end of 2022, inflationary headwinds receded significantly, consequent to
monetary tightening by the central banks worldwide; it is expected to trend lower during
2023.
Outlook: IMF has predicted that the global economic environment to remain muted in
2023. Advanced economies will likely face an economic downturn even in 2023, while
significant improvements are expected in many emerging markets. Further, improving
productivity and easing supply-chain constraints should be critical weapons to battle the
price rise.
The U.S.: GDP increased by 2.1% in 2022 compared to last years 5.9% from a very
low base. It primarily reflects the increase in consumer spending, private inventory
investment, and non-residential fixed investment. Within private-good producing
industries, the growth was led by durable goods, manufacturing and mining. Among
private-service producing industries, healthcare, retail trade, professional, scientific
and technical services saw significant growth.
Outlook: With credit tightening slowing growth, a second-half recession seems
likely in 2023. IMF has projected a slowdown in the US GDP in the same year with a 1.6%
growth. Numerous factors, such as persistent inflation, federal reserve hawkishness,
reduced government spending and banking crisis, are responsible for the outlook. But
inflation will likely improve in 2023, while the labor shortage will moderate.
Stronger-than-expected consumer demand may prevent the U.S. market from slipping further
in CY23.
The European region: Both European Union (E.U.) and the eurozone grew by 3.5% in
2022. At the beginning of the CY22, the E.U./ Europe faced one of the worst crises, a
forced industrial shutdown due to a lack of supply of natural gas due to the
Russia-Ukraine crisis. Warmer weather and new supplies from other friendly nations eased
the supply situation, but gas prices remained appreciably elevated across the E.U. region.
Household final consumption negatively contributed to GDP growth in the E.U. and
eurozone area. Contributions from both final government expenditure and external balance
were positive in 2022. Also, employment showed healthy growth in the year.
Outlook: Notwithstanding high inflation and ascending interest rates, the E.U. is
expected to grow at an average of 1% in 2023 from a previous estimate of 0.8%. With fears
of recession easing, consumer spending stabilising and recovery of economic sentiment,
E.U. growth is likely to be stronger in 2023. Moreover, with price growth expected to
average 5.8% in 2023 and 2.8% in 2024, the GDP growth forecast for 2024 is 1.6%.
Indian Economy: India was the shining star in an otherwise dull economic ecosystem
worldwide. The real GDP of 2022-23 is estimated to be 7.2%, which is among the worlds
fast-growing economies. The sharp upside displays the resilience of the Indian economy in
the face of a challenging global geopolitical backdrop.
Growth was driven primarily by robust private consumption and a sustained increase in
capital formation. Increased capex thrust by the Central Government also significantly
contributed to this strong performance. Case in point, the Indian economy experienced a
24.2% expansion in capex in FY23. GVA forms a bulk of GDP and grew by 7% in FY23. The GVA
growth in the manufacturing sector accelerated to 4.5% in the March quarter of FY23. It
was 0.6% a year ago. GVA in agriculture grew by 5.5% in FY23 compared to 4.1% last year.
The electricity, gas, water supply and other utility services grew 6.9% in the fourth
quarter compared to 6.7% a year ago.
High inflationary pressure has been experienced almost throughout the entire FY23
fiscal. To tame inflation, RBI hiked the repo rate by 250 basis points six times in a row
within FY23. It worked, and by the end of FY23, inflation had subsided to settle closer to
RBIs upper tolerance limit.
Total revenue collection was C24.65 lakh crore in FY23, 101% of the revised estimate.
Among this, C20.97 lakh crore is tax revenue (Net to center) which witnessed a 15.2%
upside compared to 2020-21. It brings the fiscal deficit down to 6.4% from 6.71% in the
last fiscal. Higher tax revenue indicates Indias ability to spend more on infrastructure
which is vital to long-term prospects for the country.
Merchandise exports hit an all-time high of US$447.46 billion, registering a growth of
6.03% in FY23. Indias overall export growth has exhibited a growth of 13.84%, primarily
due to an upsurge in service export.
Most major currencies saw high volatility in the last fiscal year because of global
geopolitical turmoil. The rupee closed FY23 at 82.18 to a dollar against 75.79 a year ago.
The RBI intervened, and Indias forex reserves fell to US$525 billion by the end of
October 2022 against US$606 billion on 1 April 2022. But reserves increased later to
US$579 billion by the end of March 2023.
A sustained increase in the private capex has been seen with the strengthening of the
balance sheets of the corporates and the resulting increase in credit financing it has
been able to generate.
Outlook: Robust growth in agriculture, construction and service sector, plus a
rebound in manufacturing in the March quarter, raised the expectation high for 2023-24.
However, despite impressive growth and development last fiscal year, weak global demand
and the effect of further monetary policy tightening may constrain economic growth in
FY24, limiting the growth rate to 6-6.5%.
The Textile Industry
Global textile market
The global textile industry was valued at US$ 959.87 Billion in 2022 and is projected
to reach US$ 1371.84 Billion by 2030, growing at a CAGR (compounded annual growth rate) of
4.05% from 2023 to 2030. Increasing demand from the fashion industry and the explosion of
e-commerce are accelerating market growth.
The U.S. is the largest market for textile products in the North American region. U.S.
imports of textiles and apparel rose by 16.03% on a year-on-year basis to US$132.201
billion in 2022. Here, China continues to be the largest supplier, followed by Vietnam. A
growing trend of buying clothes online in APAC countries bolstered the demand for
textiles. Besides, rising income, increasing organised retail and favorable government
policies are boosting the demand for textiles in this region. Asia Pacific is expected to
possess more than 50% of the global textile market share in recent future.
The textile companies in APAC are increasingly using organic _bers for apparel and home
textiles as demand for such products is rising.
Indian textile market
India is the second largest producer of textiles and clothing after China. It is also
the third-largest exporter of textiles and apparel in international markets. Indias
textile industry is exceptionally varied in terms of technology and a wide range of
applications. The textile sector accounts for over two percent of the total GDP and over
12% of the manufacturing sectors gross domestic product (GDP). It is also the largest
source of employment in the nation after agriculture.
Performance in FY23: Despite several global macro headwinds, the Indian textile
industry reported healthy revenue growth with a significant margin decline. A sharp hike
in cotton prices and sluggish demand in overseas markets seem to be the primary reasons
that affected the industry last fiscal. But the price rise impacted smaller players more
because large companies can benefit from cost savings due to bulk purchases. The fiat
performance can also be attributable to the debt-funded capex undertaken by most companies
in H1 of the financial year.
Domestic demand: Domestic sales remained sluggish due to high costs and cheap
garment imports. The manufacturers found it difficult to pass on the cotton price surge to
consumers. Smaller players were forced to postpone their operations to manage operating
losses.
Export: The growth and demand for the textiles sector have reduced last fiscal year
from pandemic highs. Exports have slowed due to the global geopolitical conflict, high
inflation, and the potential for an impending recession in important markets like the U.S.
and Europe. After a boom in FY21 and FY22, the overall textile exports from India
contracted by 13.4% y-o-y at $23.1 billion during April-November 2022. Exports have fallen
for five months - declining over 15% y-o-y in November to $3.1 billion. Domestic sales are
sluggish despite solid growth in the overall economy because of high costs and cheap
imported garments.
Indias exports of readymade garments of all textiles increased by 1.10% to $16,191.47
million in fiscal 2022-23, as per the data released by the Department of Commerce under
Indias Ministry of Commerce & Industry. The exports of cotton yarn, fabrics,
made-ups, and handloom products declined by 28.45% to $10,946.20 million in 2022-23 from
$15,298.02 million in the corresponding period of the previous fiscal. Man-made yarn,
fabrics and made-up exports decreased by 11.86% y-o-y to $4,948.88 million from $5,614.63
million in the same period.
Outlook: The textile industry is expected to experience moderate revenue growth in
2023–2024 (FY24), with domestic demand growing steadily. However, the industry
remains upbeat about export in FY24. Despite a slowdown in demand for various sectors,
including textiles, Indian exporters are optimistic about a strong performance in 2023-24.
They expect exports to rise by 11-13%, with cotton textile and apparel exporters
expecting 8-10% y-o-y growth. The industry is hopeful for a full recovery in business
after July. Further, to overcome the cost disadvantages and regain its position in the
global market, India aims to achieve a 9% CAGR in textile exports by 2026, with a target
of $65 billion in textile exports.
The Ministry of Textiles has set an even more ambitious target of $100 billion in
exports over the next five years. India must address cost disadvantages, negotiate free
trade agreements, and invest in critical areas to achieve these goals. Nearly 70% of the
industrys output is based on cotton, as opposed to the global average, where goods made
of man-made _bers have a more significant share. Due to the technical textiles low cost,
long lifespan, and versatility, India is another important market for the sectors growth.
The healthcare and infrastructure sectors primarily drive the technical textile business.
Home textile market
Global scenario: During Covid, people were forced to stay indoors because of
lockdowns. It created an urge to take care of and transform their homes, which resulted in
massive demand for home textile products. Covid is now over, but the process is still
going on, and households across the globe are going through makeovers. Naturally, it is
safe to say that, yesterday, home textiles were a mere luxury, but today it has become a
necessity. Today, the idea of home has become more eclectic and aspirational, combined
with comfort, convenience, cleanliness and hygiene. These factors have propelled a sharp
surge in demand, and the momentum is expected to sustain even in the future.
The home textiles market has emerged as a significant segment in the textile sector as
its growth is constantly being supported by growing household income, increasing
population and rising income levels. The products linked to this growth are bed and bath
linen, carpets, blankets, curtains and other furnishing segments.
Manufacturers use artificial and natural fabrics in the home textile market. Also,
various products are available in the market that is made up by mixing both natural &
artificial textiles. Increasing attraction towards home decor coupled with the changing
lifestyle of people supports the market growth.
In-home textiles in Asia Pacific dominated the market in 2022, owing to the
availability of cheap labor, raw material, products, etc. Asia Pacific is divided into
four regions: China, India, Japan and the Rest of Asia Pacific. The U.S. is expected to be
the largest and fastest-growing region in North America. However, in Europe, Germany holds
the majority of the share of the market. Germanys home textile market is expected to grow
as Germany is also the largest importer of home textiles in Europe.
FY24 trend: Infiationary pressure and a recessionary environment around the globe
will prevent the home textile segment from growing in FY24. But decreasing raw material
prices and the dissipation of a gloomy economic scenario from the years second half may
permeate industry confidence.
Mid-term trend: The global home textile market in 2022 was valued at US$125.58
billion. The market is expected to reach US$174.14 billion by 2028. Factors such as rising
income levels, expanding real estate industry, increase in consumer spending on home
renovation and decoration, rapid urbanisation, growth in E-commerce, upsurge in fabric
demand for lightweight products and many other factors would eventually result in the
increasing demand for home textiles as textiles are an easy and often sustainable way to
create change.
Indian scenario: Home textile is the most significant export contributor in the
textile industry after readymade garments. India contributes almost 7% of the worlds home
textile trade. It is also one of the top suppliers in the worlds biggest home
textile-consuming market, the U.S. Further, continuous efforts in quality improvement,
innovations through R&D programs, and other value-added features have allowed Indias
home textile products to gain more popularity in the global market. Naturally, such
superior quality products make Indian companies a leader in the U.S. and the U.K.,
contributing almost two-thirds to their exports.
Domestic demand: Indian consumers are moving towards ready-to-use products like
readymade sofas, cushion covers, curtains, bed sheets, etc., instead of customising them.
A large portion of the domestic consumption in home textiles is of the bed & bath
category alone. Still, most of this demand is met by unorganised or MSME sectors. Changing
the definition of furnishing would also include furniture and home d?cor accessories, and
these numbers would get bigger.
TOP 10 COUNTRIES EXPORTING HOME TEXTILES IN 2021
| Country |
Market share (%) |
| China |
43.93 |
| India |
8.61 |
| Turkey |
5.90 |
| Pakistan |
5.35 |
| Germany |
4.54 |
| Netherlands |
3.56 |
| United States |
3.53 |
| Belgium |
2.74 |
| Poland |
2.09 |
| France |
1.50 |
TOP 10 COUNTRIES IMPORTING HOME TEXTILES IN 2021
| Country |
Market share (%) |
| United States |
24.56 |
| Germany |
8.38 |
| United Kingdom |
4.79 |
| Japan |
4.48 |
| France |
4.08 |
| Netherlands |
3.26 |
| Canada |
2.92 |
| Italy |
2.25 |
| Spain |
2.18 |
| Australia |
2.14 |
Performance in FY23: After an ecstatic performance in FY21 and FY22, the overall
textile exports from India contracted in 2022. An estimated 16-18% degrowth is seen in
home textile export in FY23, impacted by the recessionary trend in Europe and cut down on
non-essential expenses in the U.S. amid high inflation. The depreciating rupee against the
dollar and China+1 policy across the globe restricted the turnover fall for Indian home
textile players, but margins were poorly impacted due to lower operating leverage
attributed by lower capacity utilisation.
The trend in FY24: Demand momentum is expected to recover from the first half of
FY24 as freight and cotton costs show moderation and inventory exhausts with retailers.
Further, falling commodity and crude prices will bolster margins and enhance Indias
competitiveness in export markets while successfully gaining market share in the garments
and home textile categories in key export markets.
Future trend: Growth in home textiles in India seems quite positive in coming
years, driven by healthy export demand with benefits from reciprocal FTAs (free trade
agreements). Increased hygiene consciousness, rising consumer spending on home renovation,
expansion in the real estate market, and fashion sensitivity towards domestic furniture
will also contribute to the industrys steady rise. The India Home Textile Market size is
estimated at US$ 8.74 billion in 2023 and is expected to reach US$ 13.98 billion by 2028,
growing at a CAGR of 9.84% during the forecast period (2023-2028).
|
Size |
% contribution |
| Exports to USA |
US$ 2.65 billion |
55% |
| Exports to EU |
US$ 1.2 billion |
25% |
| Exports to other countries |
US$ 0.96 billion |
20% |
| FY22E |
Siize |
Contribution |
| Revenue from Exports |
US$ 4.8 billion |
60% |
| Domestic Revenue |
US$ 3.2 billion |
40% |
The Cotton Season
2022-23: As per a report by the U.S. Department of Agriculture (USDA), global
cotton production in 2022-23 is projected to be down by 3,00,000 bales to 115.9 million,
mainly due to lower yields in India. Cotton consumption is forecast to decrease globally,
attributed to lower use in India, Indonesia, and Vietnam. The global cotton area is
forecast at 31.6 million hectares in 2022-23, 3% lower than 2021-22 and below the 5-year
average of 33.1 million hectares.
U.S.: 2022-23 exports have declined by 2,50,000 bales compared to 12 million bales
in the previous month. This is because of lower global demand, with the global consumption
forecast having dropped more than 8,00,000 bales compared with the previous month to 110.9
million.
Major consumer nations like India, China, and Pakistan are facing several headwinds,
including a downward trend in profit margins and yarn orders, resulting in moderate buying
practices for cotton lint. Lower projected U.S. exports are expected to increase U.S.
ending stocks to 4.2 million bales, 700,000 bales higher compared with last month and
symbolic of lower global consumption prospects.
2023-24: World cotton production is predicted to touch a four-year high of 116.7
million bales in 2023-24 (FY24), according to USDA. The expected growth in production
represents a slight increase of 400,000 bales from the previous year.
Most of the increase is because of rising demand for major cotton-producing countries,
with the U.S. and Pakistan leading the charge. Both countries are expected to
significantly increase by around 2 million bales in the global yield. Indian demand is
also likely to surge with an additional half a million bales. However, these gains will be
partially offset by Chinese production, which is expected to contract by 3.7 million bales
in 2023-24.
Over the next decade: World cotton mill use is expected to grow by about 17.1
million bales over the next ten years and reach about 141.3 million bales by 2031/32.
Gains in cotton production are predicted to come from increased area and improved yields.
World cotton production is projected to track the growth of cotton mill use, increasing by
14.8 million bales to around 141.3 million bales in 2031/32, at an average growth rate of
1.6%.
Indian overview: Cotton is one of Indias most important commercial crops,
accounting for about 25% of the global crop production. It is crucial in sustaining the
livelihood of around 6 million cotton farmers and 40-50 million people engaged in related
activity.
Session 2022-23: Cotton Association of India (CAI) lowered its 2022-23
(October-September) cotton crop estimate to 298.35 lakh bales. At the beginning of the
season, the estimate was 344 lakh bales compared with 307 lakh bales last season. The
downward revision is due to the decline in production in states like Maharashtra,
Telangana, Tamil Nadu and Odisha. Every season, at least 3-4 pickings occur in these
states, compared to only two pickings this season.
Further, due to less attractive prices, farmers are anticipated to hold their stocks,
hoping for better value. In 2021-22 price of raw cotton was very high, but since then,
there has been a rationalisation of price.
Cotton import projection by CAI is around 15 lakh bales compared with 14 lakh bales
last year. The estimated domestic consumption for FY23 is 311 lakh bales as against 318
lakh bales in the previous year. The exports for the season have been estimated at 20 lakh
bales.
The estimated domestic availability of cotton is projected to be 345 lakh bales,
including an opening stock of 32 lakh bales and imports of 15 lakh bales. In states like
Maharashtra, the price of raw cotton with seeds sold by farmers has fallen to 7,000-7,200
per quintal.
Cotton Balance Sheet – 2021-22 and 2022-23 (Cotton Year – October to
September)
| Particulars |
2021-22 (P)* |
2022-23 (P)* |
|
(In lakh bales of 170 kg. Each) |
(in Thousand Tons) |
(In lakh bales of 170 kg. Each) |
(in Thousand Tons) |
| SUPPLY |
|
|
|
|
| Opening |
71.84 |
1221.28 |
45.25 |
769.25 |
| Crop |
311.17 |
5289.89 |
337.23 |
5732.91 |
| Imports |
21.13 |
359.21 |
10.00 |
170.00 |
| TOTAL |
404.14 |
6870.38 |
392.48 |
6672.16 |
| DEMAND |
|
|
|
|
| Mill Consumption |
279.57 |
4752.69 |
275.00 |
4675.00 |
| S.S.I Consumption |
21.07 |
358.19 |
20.00 |
340.00 |
| Non-Textile |
16.00 |
272.00 |
16.00 |
272.00 |
| Consumption |
|
|
|
|
| Export |
42.25 |
718.25 |
35.00 |
595.00 |
| TOTAL |
358.89 |
6101.13 |
346.00 |
5882.00 |
| Closing Stock. |
45.25 |
769.25 |
46.48 |
790.16 |
* - As estimated by Committee on Cotton Production and Consumption (COCPC) in its
meeting held on 20.02.2023
Operational and Financial Performance
Indo Count improved its performance yet again in FY 23. The Company is on the growing
path wherein the financial parameters are getting stronger.
Standalone performance
Highlights
• Delivered sales volume of 74.70 Mn meters for FY23
• Achieved total revenue of C2,818 crores for FY 2022-23
• EBIDTA stood at C443.61 crores for FY 2022-23 as against C537.84 crores in
previous year
• Achieved net profit of C238.17 crores for the year ended March 31, 2023
• EPS stood at C12.03
Consolidated Performance
Highlights
• Achieved total revenue of 3,042.98 crores for FY 2022-23 as against 2,982.23
crores in previous year
• EBIDTA stood at C485.71 crores for FY 2022-23
• Achieved net profit of C276.78 crores for the year ended March 31, 2023
• EPS stood at C13.97
The Company has declared highest dividend percentage of 100% on face value of Rs. 2/-
per equity share by way of Final Dividend for 2022-23. The Company has been consistently
declaring dividend from past 8 years. The Company operates only in a single segment i.e.
Textile Segment.
Performance Highlights
|
Standalone |
Consolidated |
| Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Revenue from operations |
2,783.59 |
2,805.95 |
3,011.55 |
2,842.02 |
| Other Income |
34.14 |
140.73 |
31.43 |
140.21 |
| Total Revenue |
2,817.73 |
2,946.68 |
3,042.98 |
2,982.23 |
| EBIDTA |
443.61 |
537.84 |
485.70 |
574.31 |
| Less: Finance Cost |
57.65 |
42.14 |
62.38 |
47.36 |
| Less: Depreciation |
62.55 |
39.96 |
64.73 |
40.91 |
| Profit before Exceptional Items and Tax |
323.41 |
455.74 |
358.59 |
486.04 |
| Profit before Tax |
323.41 |
455.74 |
358.59 |
486.04 |
| Tax Expenses / (Credit) |
85.24 |
116.93 |
81.81 |
127.43 |
| Net Profit |
238.17 |
338.81 |
276.78 |
358.61 |
| Other comprehensive Income (net of tax) |
(15.43) |
(15.02) |
(40.34) |
(26.79) |
| Total Comprehensive Income |
222.74 |
323.79 |
236.44 |
331.82 |
| Basic & Diluted EPS (in C) |
12.03 |
17.11 |
13.97 |
18.11 |
Key Financial Parameters
|
Standalone |
Consolidated |
| Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Current ratio |
1.77 |
1.52 |
1.79 |
1.50 |
| Debt-Equity Ratio |
0.48 |
0.76 |
0.47 |
0.82 |
| Interest Coverage ratio |
6.61 |
11.81 |
6.75 |
11.26 |
| Net Profit Margin (%) |
8.56 |
12.07 |
9.19 |
12.62 |
| Return on Net Worth (%) |
14.26 |
23.77 |
16.36 |
24.94 |
| Operating Profit Margin (%) |
13.45 |
16.78 |
13.77 |
17.77 |
| Inventory Turnover Ratio |
2.57 |
2.74 |
2.39 |
2.45 |
| Debtors Turnover (Days) |
69 |
71 |
59 |
71 |
Internal Control Systems
The Companys well-established internal control systems ensure the achievement of its
operational, compliance as well as reporting objectives. The company has suitable policies
and procedures in place, commensurate with its current size as well as for future growth.
A broader system of internal controls and external audits has been defined and deployed to
effect continuous improvements and protect the business from potential vulnerabilities.
Policies and procedures play a critical role in the operationalisation of internal
controls. The Company also makes appropriate use of its systems and various applications
to put checks and controls for strengthening this internal control framework. All such
internal controls and their adequacy, financial and risk management policies, significant
audit findings, and compliance with accounting standards, are regularly reviewed by the
Audit Committee.
Human Resources
The Company believes that the quality of the employees is the key to its success and is
committed to equip them with skills to seamlessly evolve with ongoing technological
advancements. The Companys Human Resource (HR) team plays a pivotal role in managing and
retaining its intellectual capital in the textile industry. The Company ensures that
safety is given utmost attention – for a safe mind leads to a more productive body.
Hence, the
Company conducted thorough safety audits of its facilities. Additionally, plant safety
committees have been formed for monitoring safety aspects. The Company takes pride in
building a culture of rewarding the merits and strongly emphasises building a healthy work
environment.
The Companys employee strength stood at 6,531 as on March 31, 2023. Further, the
Company has 3,005 personnel on a contractual basis as on March 31, 2023.
Risk Management
Indo Counts risk strategy is determined by a risk appetite defined by a series of risk
criteria. The criteria are based on sectoral circumstances, sectoral realities, liquidity
available and its earnings target within accepted volatility limits. These criteria
provide a reference for its business operating. The Companys risk management framework
encompasses strategy and operations and seeks to proactively identify, address and
mitigate existing and emerging risks. The risk management framework goes beyond
traditional boundaries and seeks to involve all our key managers. There is a formal
monitoring process at the unit and company level, wherein new risks are identified,
categorised as per impact and probability mapped to key responsibilities of select
managers and managed with an appropriate mitigation plan. To ensure transparency and
critical assessment, we have a Risk Management Committee that coordinates the risk
management system. The risk management framework is reviewed annually by the Audit
Committee on behalf of the Board.
Some of the key risks and ICILs mitigation methods are given below:
Business Dynamics Risks
Mitigation Measures: I) Planning and implementing strategies to diversify its
market presence in other geographies. II) Continuously expand the customer base to
maximise the potential sales volumes and at the same time securing additional volumes from
existing customers on the basis of our record of satisfactory performance in our earlier
dealings.
Credit Risks
Mitigation Measures: I) Establishing Systems for assessment of creditworthiness of
customers. II) Obtain ECGC cover for probable credit risk. III) Appropriate recovery
management and follow up.
Market Risks / Industry Risks
Mitigation Measures: I) Development of Alternative sources for uninterrupted supply
of raw materials. II) Raw materials procurement from different sources at competitive
prices. III) Proper inventory control system. IV) Hedging adverse commodity (cotton/ coal)
price movements by availing hedge products in the commodity exchanges.
Capacity Risk
Mitigation Measures: I) Exploring new markets to increase the overall order book
and thereby increasing the Plant utilisation. II) Ensuring overall cost optimization plan.
III) Utilisation of machines to manufacture alternate products.
System Risks
Mitigation Measures: I) Upgrading the systems on a continuous basis. II) Ensuring
the "Data Security", by having access control/ restrictions. III) Data Back up
and redundancy to protect the data.
Cyber Security Risk:
Mitigation Measures: I) Placing of cyber security framework for effective controls.
II) Installing cyber security compliant tools/hardware to protect the system from cyber
attacks.
Foreign Exchange and Interest Rate Risk Management
Mitigation Measures: I) Consistent monitoring of exposure to currency fluctuations.
II) Protective management of forex measure. III) Using structured and systematic hedging
mechanism.
Economic Risk
Mitigation Measures: I) Geographical diversification of the revenues to mitigate
risk of adverse impact.
Competition Risk
Mitigation Measures: I) Offering end-to-end bedding solutions under the home
textile value chain. II) Persistent focus to capture market share through strong R&D
and value-added solutions
Environmental Risk
Mitigation Measures: I) Adherence to a diverse set of regulatory guidelines charted
out at local, state, national and transnational level. II) Consistent monitoring
regulatory changes ensuring compliance with all applicable regulations. III) Frequent
upgradation of technological equipment. IV) Achievement of ‘Giga Guru for
contributions towards environmental sustainability.
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