Indroduction
Established in 1929, IVP Limited commenced its operations in the vegetable oil sector
and subsequently expanded into various other industries. Although it was initially a
constituent of the Tata Group, It was later acquired by the Allana Group.
Notably, IVP Limited technically collaborated with Ashland Inc. in 1965 to become the
first Indian Company to produce
Foundry Chemicals. The Foundry Chemicals serves both ferrous and non-ferrous foundries
by providing resins, coatings, and other related products. In 2017, IVP Limited started
its Polyurethane Chemicals (PU) Products, which specializes in producing Polyurethane
Chemicals for the footwear and flexible film packaging sectors. The combined manufacturing
plants in Tarapur and Bengaluru possess an annual production capacity of about 50,000 MTs
per annum. IVP Limited extends technical and R&D support to its customers and offers
them innovative solutions that enhance their product quality and optimize their
manufacturing efficiency
global Economy
The Global Economic growth rate is anticipated to decline from the approximated 3.4
percent in 2022 to 2.9 percent in 2023 before bouncing back to 3.1 percent in 2024, which
still falls below the historical average of 3.8 percent between 2000 and 2019.
The World economy is encountering numerous obstacles such as COVID-19 disruptions, the
Russia-Ukraine conflict leading to supply chain disruptions, particularly in the food,
fuel, and fertilizer sectors and slowdown in larger economies.
Amid low-growth outcomes, inflation remains a concern for the Global Economy.
Central Banks worldwide are responding with synchronized policy rate hikes to counter
inflation, which is causing the US Dollar to appreciate and the Current Account Deficits
(CAD) to widen in net importing economies.
Indian Economy
Indias growth rate is expected to decrease from 6.8 percent in FY 2022-23 to 6.1
percent in FY 2023-24 and stabilize at similar levels beyond 2023. This growth is
attributable to robust domestic demand despite the presence of external challenges.
The total gross collection of GST during the 2022-23 fiscal year amounted to over 18
lakh crore, representing a 22% increase from the previous year. GST, being a consumption
tax, it is considered a high-frequency indicator of economic wellbeing. Despite major
global economies grappling with significant inflation, India has managed to maintain a
relatively stable economic outlook. Furthermore, while advanced economies are experiencing
a significant slowdown, India continues to remain fastest-growing among large economies.
A potential risk for India is the slowdown of agricultural growth, which could be due
to two possible reasons. One is probability of El Nino effect causing heat waves across
the country and it may hamper of delayed or inadequate monsoon.
Although Global commodity prices have somewhat moderated, they are still higher than
pre-conflict levels. This has widened the CAD (Current Account Deficit) for India and it
is putting pressure on stability of Indian Rupee. India has adequate foreign exchange
reserves, RBI can intervene in the foreign exchange market to control volatility of Indian
Rupee.
Despite the Indian economy appearing to be robust, it is crucial to focus on emerging
risks and challenges in domestic policy.
Industry Structure and Developments
Foundry Chemicals
India holds the position of being the second largest casting producer globally, with a
total production of 12.49 million metric tonnes. The value of this production amounts to
USD 20 billion, out of which USD 3.5 billion worth of components are exported.
The Indian governments initiatives, such as ‘Make in India, ‘Ease of Doing
Business, and infrastructure development, coupled with liberalized foreign investment
norms, have spurred investments in the manufacturing sector, positively affecting the
foundry industry.
But the foundry industry is facing significant challenges due to the increase in raw
material costs caused by the China disruptions and the ongoing Russia-Ukraine war.
Customers are not willing to compensate for this increase. With very thin margins,
operating foundry has become challenging for the industry, resulting in the sub scaling of
foundries. The market is presently experiencing a period of consolidation.
Footwear Chemicals
India is the second largest footwear producer in the world. This industry holds an
important place in the ‘Make-in-India initiative. The expanding demand for footwear
in Indias domestic market is a significant driver of the countrys footwear industry
growth. This is primarily due to the countrys growing population and increasing
disposable income, resulting in increased footwear consumption. This trend is expected to
continue in the near future. Furthermore, the rise of e-commerce in India has facilitated
online footwear purchases for consumers, contributing to the industrys expansion.
Adhesives for Flexible Film Packaging
Increased consumption of packaged food and demand for quality products has led to solid
growth in the packaging market in India, particularly in the food and beverage sectors.
Furthermore, growing investments in the food processing industry are creating new
packaging opportunities aimed at reducing agricultural crop waste. As a result, growth in
the food and beverage sector will remain the primary growth driver of the packaging market
in India.
Financial Performance
During the financial year 2022-23, the Company continued to focus on capacity
utilization and sales growth.
Gross Revenues from operations grew significantly to 66,095 lakhs in the current year
from 55,658 lakhs in the previous year.
EBIDTA grew to 4,249 lakhs as compared to 3,841 lakhs in the previous year.
PBT before exceptional items grew to 2,505 lakhs as compared to 2,335 lakhs in the
previous year. Apart from this, Company earned profit of 1,290 lakhs during the year on
assignment of leasehold rights in respect of Investment Property and sale of Investment
Property, with this PBT for the current year is 3,795 lakhs.
PAT also increased to 2,802 lakhs as compared to 1,763 lakhs in the previous year.
Strategies for the Future
The Company is continuously introducing numerous new products across all the sectors it
serves. Currently, the Company is focused on accelerating the growth rates in its Foundry,
Footwear, and Adhesive Chemicals.
Operations
The Manufacturing sites located at Tarapur and Bengaluru are committed to providing
quality products and services to their customers. In line with this commitment, both sites
have undergone continual improvements in terms of new technology absorption and
automation.
The Company has implemented operational excellence tools to standardize processes and
activities, ensuring that they are efficient and effective. These improvements have
enabled the Company to meet the evolving needs of their customers and stay competitive in
the market.
The adoption of new technology and automation has resulted in improved production
efficiencies,reduced turnaround times, and increased quality standards. As a result, the
Company has been able to optimize its operations, improve customer satisfaction, and
enhance overall business performance.
Internal Financial Control Systems
The Company recognizes the importance of maintaining effective internal controls to
ensure the accuracy and reliability of its financial reporting, safeguarding of assets,
and compliance with laws and regulations. To achieve these objectives, the
Company has implemented internal control policies and procedures, and self-reviewing
mechanisms that cover operational, financial, and entity level transactions.
The internal control policies and procedures are periodically reviewed and updated to
ensure their continued effectiveness and relevance.
Key Financial Ratios as on March 31, 2023
In accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2018 the Company is required to give details of significant changes (change
of 25% or more as compared to the immediately previous financial year) in key
sector-specific financial ratios.
The Company has identified the following ratios as key financial ratios:
| Particulars |
2022-23 |
2021-22 |
| Debtors Turnover (Number of Days) |
115 |
114 |
| Inventory Turnover (Number of Days) |
57 |
60 |
| Current Ratio (x) |
1.18 |
1.05 |
| Interest Coverage Ratio (x) |
3.05 |
3.35 |
| Debt Equity Ratio (x)* |
1.01 |
1.71 |
| Operating Profit Margin (%) |
5.64 |
5.98 |
| Net Profit Margin (%)** |
4.24 |
3.23 |
The reason for variation in key ratios are as under:
* In the current financial year, Company has generated positive cash flows from
operating activities and proceeds from sale of investment property, which led to reduction
in borrowings.
** In the current financial year, Company has achieved increase in revenues and
profitability as compared to the previous financial year.
Opportunities, Threats, Risks and Concerns
The Company is proactive in identifying potential risks and takes necessary measures to
mitigate them. The risk management actions are reviewed periodically by the Management and
Auditors, and the status is reported to the Audit Committee. The suggestions provided by
the Audit Committee are implemented and reviewed regularly.
The Management has identified various opportunities, risks and threats that may have
impact on the Company's operations.
Opportunities:
- Scope to further increase domestic market share.
- Tap Export potential in neighbouring countires.
Risks:
- One of the risks identifiedis the emergence of new pandemics globally like COVID-19,
which can cause disruptions to the Companys business activities.
- Regulatory restrictions in the market, environmental protection, and Government
policies may impact the Companys operations.
- Currency exchange fluctuations can also cause risks for the Company.
- Disruption in production activities due to machinery breakdowns is another potential
risk identifiedby the Management.
Threats:
- The Company also faces threats such as increasing competition from new entrants,
which can impact its market share.
- The introduction of new technologies that make current products irrelevant is also a
threat to the Companys operations.
- Working capital intensive nature of business.
The Management is taking necessary measures to address these risks and threats to
ensure the smooth functioning of the business.
Research and Development
The Company considers R&D to be a crucial aspect of its strategy and continually
monitors outcomes to achieve sustainable growth in line with market realities. The
Research team is dedicated to providing effectivesolutions to customers through continuous
product development and process optimization while implementing cost-saving measures such
as import substitutions. Additionally, the team focuses on developing new grades to stay
ahead of competitors, both domestically and internationally. Over the year, the team
successfully developed many new formulations that catered to new customer requirements and
expanded the Companys product portfolio.
Human Resources
The Company implemented several engagement programs for its employees emphasizing
Health and Wellness training to provide support. Monthly wellness seminars were held to
boost employees morale and promote a safety, health, and wellbeing mind-set. The Human
Resources Department played a crucial role in driving the organizations people
development strategy, establishing mechanisms for talent identification and
performance-based rewards and recognitions that are reviewed annually. Throughout the
year, the industrial relations remained pleasant and friendly.
Health, Safety and Environment
The Company is committed to continuously improve its Quality, Environment, Occupational
Health, and Safety Management practices. The Corporate office and both the factory sites
have adopted an Integrated Management System (IMS) and includes ISO 9001:2015, ISO
14001:2015, and ISO 45001:2018 certifications.
To uphold its commitment to sustainable development, the Company is taking continuous
steps to reduce effluent loads, lower energy and water consumption, minimize plant
emissions, and promote green practices at its factory sites. Additionally, manual controls
have been replaced with Process Automation controls to improve safety and process
outcomes.
The Company remains focused on its well-established ‘zero accident policy, and
all employees across all sites received refresher safety training to raise awareness and
minimize unsafe incidents.
The Company continues its tradition of participating in ‘Safety Week and
highlighted various safety issues through competitions and other initiatives. The
management and workers participated enthusiastically in this event.
Cautionary Statement
Statements in the Management Discussion and Analysis Report describing your Companys
objectives, projections, estimates and expectations may be interpreted as
"forward-looking statements" within the meaning of applicable securities those
expressed or implied. Important factors that could make a lawsandregulations.
Actualresultscoulddiffer differenceto Companys operations include economic conditions
affecting demand/ supply, price conditions in the domestic and overseas markets in which
the Company operates, changes in Government regulations, tax laws and other statutes.
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For and on behalf of the Board of Directors |
|
|
Mandar P. Joshi |
|
|
Whole Time Director and CEO |
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DIN: 07526430 |
| Place : |
Mumbai |
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| Date : |
April 27, 2023 |
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| Registered Office: |
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| Shashikant N. Redij Marg, |
|
| Ghorupdeo, Mumbai - 400 033 |
|
| CIN : |
L74999MH1929PLC001503 |
|
| Tel : |
022-35075360 |
|
| Email : |
ivpsecretarial@ivpindia.com |
|
| Website : |
www.ivpindia.com |
|
+91-9892691696
