Industrial & Prudential Investment Company Ltd Management Discussions.
The growth of the global economy, especially that of US and Europe, has continued to improve this past year. The United States administrations move to curb imports to reduce trade deficits and to support their local industries will impact the developing economies of India and China. China has taken a drastic step to reduce pollution by shutting down environmentally hazardous industries across the country and the subsequent rise in prices of metals and other products is supporting many Indian industries. However, rising oil prices and US bond yields may impact FII inflows into emerging economies.
GST was finally implemented in India and had its initial disruption on the Indian economy. The GST collections are now stabilising and improving, and combined with the Make In India initiative, are likely to have a positive impact on the economy. The GDP growth has been stable and inflation has remained relatively fiat. However with rising oil prices and dollar appreciation, the current account deficit is likely to start widening again. The government is likely to support GDP growth in FY19 through increased infrastructure and rural spends in light of an upcoming General Election.
The activities of the Company comprise of investment mainly in equity shares and are directly related to the performance of the stock market. With improving economic indicators and easy liquidity, markets are likely to be stable. The Company is, however, trying to invest its funds into diversified mutual funds to minimise market risk.
The company has improved its financial performance in the year under review, with significant unrealised gains in its investment portfolio.
Opportunities, Threats, Risks and Concerns
The pump industry, in which the Company has significant exposure, is likely to benefit from the improving industrial scenario in the country. However, there is exposure to market risks and short-term volatility from rising oil prices, withdrawal of FIIs from the Indian markets and liquidity tightening can adversely impact the Companys investments. The Company is continuously reviewing its portfolio to reduce or limit its risk to the extent possible.
The information and opinion expressed in this section of the Annual Report may contain certain statements, which the Management believes are true to the best of its knowledge at the time of its preparation. The Company and the 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.
|For and on behalf of the Board of Directors|
|Date: 27th April, 2018||Chairman & Managing Director|