"Manaksia is amongst the country?s leading producers of
Aluminium Flat Products. The factories of your company are equipped with high performance
continuous horizontal strip caster, State of the Art Cold rolling mill and machinery like
Cut - to - Length, tension leveller, slitter, Annealing Furnace that help producing
Aluminium Sheet and Coil to meet the requirements of general as well as specific
applications."
Key Statistics: ( in Lacs)
| 46,637 |
3,310 |
7.10% |
561 |
14,496 (mt) |
| Revenue |
EBITDA |
EBITDA Margin (%) |
Capital work-inprogress |
Aluminium metal production |
GLOBAL ECONOMY OVERVIEW
During the fiscal year 2022-23, the global economy experienced
significant impact from the Russian invasion of Ukraine. Commodity prices turned extremely
volatile; this negatively impacted multiple industries and their profitability.
Furthermore, the war disrupted global supply chain causing delays and shortages of certain
commodities. Inflation and thereby interest rates rose across the world, this slowed
demand recovery with deceleration in consumer spending and business investments. As a
result, economic growth momentum slowed as the year progressed. Your companys business
too was affected by these trends. These necessitated adaptive measures and strategic
planning to mitigate impact.
As the global demand moderated from the post Covid surge, the
International Monetary Fund (IMF) cut its global growth forecast for 2023 and warned of a
potential global recession next year. It suggested that "the slowdown of the global
economy has intensified," calling it "the weakest growth profile since
2001," besides the Great Recession and the pandemic.
Frequent Covid related lockdowns in China and negative impact of high
energy prices on Europe slowed growth momentum in the respective regions while
stimulus-led recovery in US began to fade. India, on the other hand, stood strong as
consumer spending and government expenditure expanded.
COMMODITY MARKETS OVERVIEW
The global commodity markets began the year 2022-23 on a high note as
post-Covid recovery gained momentum across the world. Also, uncertainty, brought by
Russian invasion of Ukraine (Feb 2022) spiked prices of many commodities and especially of
Oil, Aluminium, Nickel of which Russia is a significant global producer-exporter. LME
Aluminium rose to a record high above $4000/mt in March 2022 by jumping 57% in that
quarter.
However, subsiding fear of supply uncertainty and leading indicators
pointing to a global slowdown in industrial demand pulled down prices rapidly in 2022-23.
Brent Crude Oil fell a little more than 20% in 2022-23; Aluminium prices fell by about 30%
in that period.
Such large swings in commodity prices brought caution amongst
consumers. Rising interest rates, combined with high commodity prices, increased the
working capital deployment (and thereby cost) of most commodity businesses.
Collectively, these factors posed significant challenges to the global
commodity markets, requiring industry players to adopt strategic measures to mitigate the
impact and ensure their resilience in the face of ongoing uncertainties.
INDIAN ECONOMY
In its latest quarterly update, "World Economic Outlook",
International Monetary Fund (IMF) has upgraded Indian growth forecast to 6.1% in 2023
reflecting momentum from stronger-than-expected growth in the fourth quarter of 2022 as a
result of stronger domestic investment. It further expects Indian growth to accelerate to
6.3% in 2024.
The Government of Indias strong infrastructure push under the Prime
Ministers Gati Shakti (National Master Plan for Multimodal Connectivity) initiative,
logistics development, and industrial corridor development will contribute significantly
to raising industrial competitiveness and boosting future growth.
Improving labour market conditions and consumer confidence will drive
growth in private consumption. The central governments commitment to significantly
increase capital expenditure, despite targeting a lower fiscal deficit of 5.9% of GDP,
will also spur demand. Helped by recovery in tourism and other contact services, the
services sector will grow strongly in FY2023 and FY2024 as the impact of COVID-19 wanes.
However, manufacturing growth in FY2023 is expected to be tamped down by a weak global
demand, but it will likely improve in FY2024. Recent announcements to boost agricultural
productivity, such as setting up digital services for crop planning and support for
agriculture start-ups will be important in sustaining agriculture growth in the medium
term.
Inflation will likely moderate to 5% in FY2023, assuming moderation in
oil and food prices, and slow further to 4.5% in FY2024 as inflationary pressures subside.
In tandem, monetary policy in FY2023 is expected to become more accommodative in FY2024.
The current account deficit is projected to decline to 1.9% in FY2024. Growth in goods
exports is forecast to improve in 2024 as production-linked incentive schemes and efforts
to improve the business environment, such as streamlined labour regulations, improve
performance in electronics and other areas of manufacturing growth show performance.
Services exports growth has been robust and is expected to continue to strengthen Indias
overall balance of payments position.
The Reserve Bank of India (RBI) has maintained its GDP growth
projection for the fiscal year 2023-24 at 6.5%, with Governor Shaktikanta Das noting that
the Indian economy and financial sector remain resilient amidst global challenges.
INDUSTRY STRUCTURE AND DEVELOPMENTS
Prime Minister Narendra Modi has highlighted the resilience of the
Indian economy in the face of global challenges, as indicated by the GDP growth figures
for 2022-23. In a tweet, he emphasized that this strong performance, combined with overall
optimism and positive macroeconomic indicators, demonstrates the promising trajectory of
the Indian economy and the determination of its people.
According to the Chief Economic Advisor (CEA), several noteworthy
trends emerged in the economy. Exports of goods and services accounted for 23.5% of the
GDP, marking the highest level since 2014-15. Private consumption reached its highest
level since 2006-07, representing 58.5% of GDP Gross fixed capital formation, a reflection
of sustained growth, reached its highest point since 2013-14, accounting for 34% of GDP.
In terms of specific sectors, the construction sector, which is
labour-intensive, experienced a GVA growth of 10% in 202223, compared to 14.8% in the
previous year (2021-22). The growth of GVA in the mining and quarrying sector slowed to
4.6% from 7.1%. The GVA of electricity, gas, water supply, and other
utility services rose by 9%, slightly lower than the 9.9% growth in 2021-22. Meanwhile,
the GVA of public administration, defense, and other services grew by 7.2% in 2022-23,
compared to 9.7% in the preceding year.
ALUMINIUM INDUSTRY OUTLOOK
According to the analysis by Triton Market Research, the Global
Aluminium Market is likely to reach $221.11 billion by 2030, from $146.05 billion in 2022,
with a CAGR of 5.24% during the forecast period 2023-2030. India is expected to showcase
the fastest growth rate globally, with a CAGR of 6.54% over the forecasted duration.
The element aluminium has a silver-white sheen and is flexible and
non-magnetic by nature. The letter Al stands for aluminium, which is the most prevalent
metal in the crust of the world. Metal is seeing strong demand among end customers in the
packing, electrical, and aerospace industries. The market is being driven by the increased
market for packaged goods and the expanding use of aluminium instead of stainless steel by
automakers. The market is expanding as a result of the increasing demand for electric cars
and OEM producers.
However, because growing consumerism and demand for packaged foods is
helping bring demand for foil and can companies.
The intensity of use of Aluminium in automotives has been rising to
lower emissions and improve fuel efficiency. Manufacturers of electric vehicles use this
metal to lighten their vehicles and increase their operating range. Due to its lightweight
composition and similar physical characteristics to stainless steel, automakers like BMW
and Mercedes are replacing it more frequently. According to estimates, the aforementioned
elements will fuel market expansion.
GROWTH FACTORS
The second highest malleable and sixth most highly flexible material on
the planet is aluminium. With a density of just 2.7g/cm, it is incredibly light,
dust-resistant, and highly conductive, and when alloyed, it demonstrates great strength.
Because it is harmless by nature, maintains food for a long period, and prevents the
growth of microbes, it is widely employed in the food and packaging industries as well as
the pharmaceutical industry.
One of the more prevalent non-ferrous transition metals in the crust of
the Earth is aluminium. It is strong, malleable, flexible, lightweight, and resistant to
oxidation and corrosion. Because it easily forms combinations with the other chemical
components, it is widely used in a wide range of application. For instance, wheels,
motors, chassis, and other components of contemporary automobiles are made of aluminium
combined with silicon and magnesium. Around the world, it is also utilized to make
refrigerators, desktop computers, tablets, cell phones, and other electrical devices.
KEY MARKET DRIVERS
Secondary aluminiums rising popularity will promote growth
• An important portion of the worlds usage of aluminium is
secondary or recycled aluminium. Because of its cost- effectiveness, scrap from machinery,
automobiles, equipment, and beverage cans is recycled and reused. Reprocessing used metal
or scrap uses a small portion of the energy needed to make brand-new metal from ore,
minimizing the harm to the environment.
• Additionally, initiatives including the creation of car
dismantling, shredder, and environmental safety centers are anticipated to promote market
expansion. The widespread use of the material in the transportation sector is also
predicted to boost aluminium consumption.
Numerous uses across several industries, and expanding building
industries
• Due to its distinct physical characteristics, aluminium is in
higher demand across a wider spectrum of industries and has more uses. Because metal is
lightweight and has good electrical conductivity, aluminium is utilized for long-distance
transmitting power. Because it can be easily moulded and worked into the fuselage and
wings of light planes, aluminium alloys like 6061 are frequently utilized in this sector.
Its high corrosion resistance makes it the perfect material for use in aircraft. Due to
its thermal characteristics, aluminium is utilized in refrigeration, air conditioning, and
heat transfer systems.
• Additionally, because of its malleability, this metal can be
shaped into thin strips and employed in the packaging sector. Siding, roofing, transparent
panels, doorframes, window, staircases, central heating, furnishings, air conditioning
systems, and many other things are made with it in building projects.
KEY MARKET OPPORTUNITIES
Aluminium is good electricity and heat conductivity and is reasonably
priced
• Aluminium is flexible, robust, and doesnt easily melt or
distort when exposed to high temperatures. Additionally, it is lightweight, will not rust
or corrode readily, and is a superior heat and electrical conductor. The worldwide car
industry is increasingly preferring aluminium since it is reasonably inexpensive. This is
understood by aluminium processors all over the world. To strive to build future
generations of automotive components that are better in all of the aforementioned features
and at a significantly lower cost point, they are spending a lot of money on development
and research.
End-Use Industry Insights
In terms of the end-user, the transport sector held the biggest market
share. This markets expansion is being driven by the growing use of metal in automobiles
due to its lighter lightweight and improved physical characteristics. Many emerging
countries are making significant investments to build out their infrastructure. These
countries are likewise progressing quickly. As more people throughout the world own cars,
the global aluminum sector is anticipated to grow with the automotive industry worldwide.
Because more people throughout the world drive cars, the transportation
sector dominated the global aluminum market in 2021. As a result, expansion in the global
transportation sector is anticipated to fuel expansion in the global aluminum market.
During the projection period, the packing sector is anticipated to increase at a
significant CAGR. This industry is expected to increase as a result of the growing demand
for aluminum from producers of packaged foods because of its non-permeable properties.
Regional Insights
Due to reasons like rapid and widespread industrialization, quick and
widespread urbanization, increasing investment and activities in infrastructure and
infrastructure, and development in the automobile industry, Asia-Pacific is predicted to
have the fastest expanding market. Because big consumers like Japan, China, and India are
present, it is the main factor driving the markets expansion. The regions desire for
metal is being driven by the expanding construction and automobile industries. The market
is expanding in Europe as a result of factors like the introduction of legislation to
reduce automobile pollution and the strong demand from end-use sectors like solar cells
and packing.
Overview of Operations
Results
During the year under review, the total revenue of your Company stood
at 46,637.02 lacs, as compared to 43,751.65 lacs during the year ended on March 31,
2022. The Company made a profit of 881.86 lacs as compared to a profit of 757.47 lacs
during the year ended on March 31, 2022.
Projection for the Financial Year 2023-2024
The company continues to follow the various steps initiated in the
previous financial year, for improving the profitability in the future years. These steps
include:
• Focusing on developing new customers in India and Overseas for
value added products by marketing Colour Coated Aluminium Sheet/Coils, Embossed
Sheet/Coils.
• Initiating steps for improving quality of Finished Products, to
help in increasing the top line and customer satisfaction, leading to improved margins.
• The Company is also expanding its domestic market Size with
concrete focus on expanding sales in Northern and Southern Region of India.
• Revamping of Plant & Machineries to reduce cost of
conversion.
• Initiating steps for cost reduction by curtailing certain costs
like power & fuel, manpower, administration, and scheduled repair & maintenance.
Rationalizing contractual and own employees to reduce manpower cost.
• Developing new suppliers of raw materials in Australia, UK, UAE
and other European countries for taking advantage of competitive rates and better quality.
Risks and Concerns
The Company is exposed to several inherent market risks from its normal
business activities. These risks include changes in raw material prices, foreign currency
exchange rate, interest rate which may adversely impact the Companys financial assets,
liabilities and/or future cash flows. The Company is trying to mitigate these risks by
carefully planning an optimum sales mix, product diversification, innovation and
penetration of domestic and international markets and active treasury management, Further
cost saving measures across all segments of the Company, would help in improving the
margins in an otherwise difficult market.
Internal Control System
The Company maintains all its records in ERP (SAP) System and the work
flow and approvals are routed through ERP (SAP). The Company has appointed Internal
Auditors to examine the Internal Controls and verify whether the workflow of the
organization is in accordance with the approved policies of the Company. In every Quarter,
during approval of Financial Statements, the Internal Auditors present to the Audit
Committee the Internal Audit Report and Management Comments on the Internal Audit
observations.
Key Financial Ratios
In accordance with SEBI (Listing Obligations & Disclosure
Requirements) (Amendment) Regulations, 2018, the Company is required to give details of
significant changes in Financial Ratios (i.e., change of 25% or more as compared to the
immediately previous financial year) along with a detailed explanation thereof, to
| Particulars |
FY 2022-23 |
FY 2021-22 |
Year to Year change |
Year to year change (%) |
| Debtors Turnover (Times) |
10.77 |
10.56 |
0.18 |
1.70% |
| Inventory Turnover (Times) |
2.59 |
2.56 |
0.02 |
0.78% |
| Interest Coverage ratio (Times) |
1.96 |
1.36 |
(0.14) |
(10.29%) |
| Current Ratio (Times) |
1.35 |
1.27 |
0.08 |
6.30% |
| *Debt Equity Ratio |
1.15 |
1.09 |
0.06 |
5.50% |
| EBITDA Margin (%) |
7.10% |
6.43% |
0.69% |
0.69% |
| Net Profit Margin (%) |
1.90% |
1.74% |
0.20% |
0.20% |
| Return on Net worth (%) |
7.09% |
6.41% |
0.68% |
0.68% |
Human Resources
The Company believes that the quality of the employees is the key to
its success and is committed to providing necessary human resource development and
training opportunities to equip employees with additional skills to enable them to adapt
to contemporary technological advancements. Industrial relations during the year continued
to be cordial and the Company is committed to maintain good industrial relations through
effective communication, meetings and negotiation.
Key initiatives with respect to Stakeholder relationship
A Stakeholders relationship committee is formed for reviews of
statutory compliances and services relating to security holders, dividend payments and
performance of Registrar and Transfer Agents. No complains was raised or received from any
shareholders during the year.
Finance Cost
Finance Cost, during the year under review stood at 1689.21 lacs, as
compared to 1331.88 lacs during the period ended on March 31, 2022. This increase is on
account of increased investment by the Company in production related activities, raw
material price increase.
Cautionary Statement
Statements in this Managements Discussion and Analysis Report
describing MALCOs estimates and expectations may be forward-looking statements. Actual
results may differ materially from those expressed or implied. Important factors that
could make a difference to MALCOs operations include economic conditions affecting demand
and supply for the products manufactured by the company; price conditions in the domestic
and overseas markets in which the company operates; changes in Government regulations, tax
laws, statutes and other incidental factors.
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