Industrial & Prudential Investment Company Ltd Management Discussions

Economic Outlook

The World Economic Outlook Report of April 2024 from IMF describes the Global Economic situation as "Steady but Slow" Global growth, estimated at 3.2 percent in 2023, is likely to continue at the same pace in 2024 and 2025. Global inflation, however has eased from its mid-2022 peak, but the central banks are still holding the interest rates in view of the supply chain disruptions for the inflation concerns.

India is now the worlds fifth-largest economy and is currently one of the fastest growing economies in the world. Indias GDP growth remained buoyant at 8.2% in FY 2023-24, as reported in the latest data released by the Government of India. The manufacturing sector has registered a growth of 14% in 2023-24, supported by robust domestic demand, moderate inflation, a stable interest rate environment, and strong foreign exchange flows. Indias economic outlook looks very optimistic as the Indian Government plans for becoming the third largest economy by 2027. Increased capital expenditure and the governments proactive policy measures such as Production Linked Incentive (PLI) Schemes will likely continue to drive growth in near future. According to the IMF, the Indian economy is expected to expand steadily at 6.5% in 2024.

In the equity markets, foreign investors continued their faith with more allocations of funds. Considerable interest was seen from the domestic investors in the markets in both retail and institutional segments. Indian Markets, therefore, have rallied to new highs and given one of the best returns in the world. With the continued government focus on infrastructure, public spending, softened inflation, robust domestic demand and reduced crude oil prices, the outlook for the Indian Market remain positive.

Financial Performance

Being an NBFC, the financial performance of the Company is dependent on that of the stock market. Your Companys equity portfolio is in diversified companies representing various sectors, and fixed income securities. The company has delivered a better performance than the benchmark index due to its policy to invest in stocks that have long-term sustainable growth potential in the current scenario.

The company is one of the promoters of KSB Limited, which has delivered robust working and financial performance during the year under review and this was reflected in its stock price. The Company is expected to do better in the future due to the overall growth anticipated in the economy.

Other investments have also performed better during the year under review. The management believes that the companys investments will continue to perform well in future. The portfolio is being monitored periodically with the help of financial consultants and investment advisory and changes are being made time to time to seize the long term opportunities in the market.

Risks

The company is in the business of the making long-term investments in equity and other securities. Accordingly, the investments are subject to market risks.

The companys portfolio of equity is well diversified across companies and sectors to mitigate the risks. The investments are being monitored periodically with the help of expert investment bankers and advisors, with risks and opportunities being identified, and required actions are taken to balance the risks.

The fundamental policy of the company is to ensure that the investments of the company remain in companies with a promising business outlook and a long term view.

Disclaimer

The information and opinion expressed in this section of the Annual Report contains statements, which are the view of Companies management at the time of its preparation and are intended for shareholders communications. The above statements or contain are not intended to induce anyone to buy the share of the company and the Company & its management shall not be held liable for any loss, which may arise as a result of any action taken on the basis of the information contained herein.