j l morison india ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENT:

Indian Economy:

The post pandemic recovery of the Indian economy was stronger than-expected, led by private consumption and aided by a rebound in government spending. The Indian economy has been relatively resilient amidst the prevailing global headwinds and uncertainty.

In spite of severe global headwinds, India remained one of the fastest growing major economies enabled by purposeful interventions by policy makers. The Government of India has continued its thrust on structural reforms to raise Indias potential growth.

FMCG (Fast Moving Consumer Goods) Sector:

FMCGs are all consumable items (other than groceries/pulses) mostly in packaged form that one needs to buy at regular intervals. These are items which are used daily, and so have a quick rate of consumption, and a high return. FMCG can broadly be categorized into three segments: Personal Care, Home care, Food & Beverages.

Our Company is engaged in the marketing of personal healthcare, grooming products, medicated toothpaste, and baby care products. It has consciously stressed on growing its own branded products led by the baby care feeding bottles and accessories range. We continue to launch new products from time to time.

During the previous couple of years, the FMCG sector had seen a remarkable transformation on account of growing awareness, urbanization, large working population, easier access and changing lifestyles. The urban segment is the largest contributor to the overall revenue generated by the FMCG sector in India. Yet, compared to urban India, the FMCG market has risen more quickly in rural India during the past few years.

OPPORTUNITIES AND THREATS/ RISKS AND CONCERNS:

The growing middle class Indian population, as well as the Rural sector, continue to present a huge potential for this sector.

The Foreign Collaborator/Licensor companies, with whom J. L. Morison (India) Ltd. is associated, could always be vulnerable to Mergers and Acquisitions by other larger companies as has been the trend in our industry internationally for the last few years.

Cheaper imports from China and aggressive competition from MNCs continues to be a risk.

SEGMENT - WISE OR PRODUCT - WISE PERFORMANCE:

The Company is primarily engaged in the business of personal care products which the management recognises as the sole business segment.

Under the personal care segment, the Company earns revenue mainly from three products viz. Baby Care (Morisons Baby Dreams), Oral Care (Emoform-R toothpaste) and Hair Care (Bigen).

All products line of the Company continued to perform satisfactorily, during the financial year 2022-23. The Company continues to explore newer opportunities including launch of new products in the own brands.

OUTLOOK:

In the backdrop of a challenging environment in this fiscal, we dynamically managed our business to deliver strong bottomline performance. We will continue to take this approach in financial year 2023-24 where operating environment is expected to remain challenging with further input cost inflation and soft FMCG market growth. Our strategic clarity, the strength of our brands, our execution prowess, agility and adaptability will continue to hold us in good stead. We remain confident of outpacing FMCG market growth and maintaining margins at healthy levels.

KEY FINANCIAL RATIOS:

In accordance with the SEBI (Listing Obligations and Disclosures 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	F.Y. 2022-2023	F. Y. 2021-2022
Debtors Turnover Ratio	38.98	35.03
Inventory Turnover Ratio1	4.87	3.53
Interest Coverage Ratio2	294.38	161.41
Current Ratio	1.35	1.48
Debt Equity Ratio	0.00	0.00
Operating Profit Margin (%)3	9.48	6.88
Net Profit Margin (%)3	7.34	5.27
Return on Networth4	5.38	3.10

 

1 Inventory Turnover Ratio has improved due to better inventory management.

 

2 Interest Coverage Ratio has improved due to decrease in finance cost and increase in profit before tax.

 

3 Operating Profit Margin / Net Profit Margin has improved due to increase in the turnover and other income.

 

4 Return on Net worth has improved due to increase in the net income of the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. Company believes that Internal Control is necessary for good corporate governance. The Company has effective internal control systems under which Management Reports on key performance indicators and variance analysis are made. Management Meetings are regularly held where these reports and variance analysis are discussed and action plans are initiated with proper follow up. The Internal Audit function also reviews the execution of all operational units to ensure controls are adequately exercised. Operational Reports are tabled at Board Meetings after being discussed in Audit Committee.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The Companys financial performance and analysis is already discussed in detail in the Directors Report, which forms part of this Annual Report.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

Industrial relations at plant location, branch offices and depots remain to be harmonious. Human capital is at the heart of our companys success. It can be attributed through our diversified and competent workforce, capable leadership and empowering culture and efficient operational excellence. The Company strives to remain as a responsive and market-driven organization, which requires a very good quality of manpower resources. It lays great emphasis on evaluating the human resources in a fair manner and rewarding timely for any exceptional performance. Retaining young and talented human resources continues to be a challenge in the present business environment. We try and meet these challenges by better mentoring, keeping a personalized organization culture, rewarding unique initiatives. As at 31^st March, 2023 the Company has strength of 393 employees.

CAUTIONARY STATEMENT:

The statement in the Management Discussion and Analysis Report cannot be construed as holding out any forecasts, projections, expectations, invitations, offers, etc. within the meaning of applicable securities, laws and regulations. This Report basically seeks to furnish information, as laid down within the different headings to meet the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

	For and on behalf of the Board of Directors of
		J. L. Morison (India) Limited
	Sanjay Kothari	Sohan Sarda
Place: Mumbai	Director	Executive Director & CEO
Date: 30th May, 2023	DIN:00258316	DIN:00129782