MANAGEMENT DISCUSSION & ANALYSIS REPORT ECONOMY & INDUSTRY
OVERVIEW:
The global economy is gradually recovering from the impact of pandemic
and at the same time facing new challenges emerging from Russias invasion of
Ukraine. The global economic growth was estimated at a slower 3.2% in 2022, compared to 6%
in 2021 (which was on a smaller base of 2020 on account of the pandemic effect). The
relatively slow global growth of 2022 was marked by the Russian invasion of Ukraine,
unprecedented inflation, pandemic-induced slowdown in China, higher interest rates, global
liquidity squeeze and quantitative tightening by the US Federal Reserve.Global growth is
expected to swing back at this pace over the next year, while global inflation is likely
to moderate and yet remain above inflation targets in many economies. Global cooperation
and calibrated fiscal and monetary policies will be essential for setting the economies on
a favorable growth path.
India continues to be among the fastest growing economies in the world.
Despite the global slowdown, the Indian economy is exhibiting robust resilience and
overall economic activity remains strong. Indias real GDP growth is estimated at
7.2% in FY 2022-23 as against 9.1% in FY 2021-22, It reflects relatively robust domestic
consumption and lesser dependence on global demand.
India has a long runway for growth and according to the IMF, the Indian
economy is expected to grow steadily at 5.9% in FY 2023-24 before rising to 6.3% in FY
2024 -25. Factors such as a conducive domestic policy environment, various dynamic reforms
undertaken by the government such as higher capital expenditure, production-linked
incentives (PLI) scheme and ‘Atmanirbhar Bharat, thrust on domestic
manufacturing and infrastructure development, strong domestic demand, export growth,
technology-enabled development and energy transition among others will stimulate growth in
FY 2023-24.
Construction industry in India is one of the fastest growing industry
and is said to be second largest industry in India after agriculture. The sector also
makes significant contribution to the national economy, along with providing employment to
the large number of people. The construction industry is broadly categorized into three
segments Infrastructure (Roads, Railways, Irrigation etc.), Industrial (Refineries, Power
Plants, Factories etc.) and Real Estate (Residential, Commercial, Institutional etc.). As
infrastructure is highly responsible for propelling growth of other sectors and
Indias overall development, Government of India is giving huge impetus for
development of infrastructure and construction services through focused policies such as
open FDI norms, large budget allocation to infrastructure sector, housing for all, smart
cities mission etc. India has become a large market for infrastructure and construction
activities.
OPPORTUNITIES & THREATS:
The risk be it external or internal, is inherent in every business.
Economic slowdown impact most segments of the economy. The main concerns are slowdown in
growth in the economy, demand constrains for the products arising from the prevailing
environment, natural calamities, low disposable income and charge in the priority of
consumers and fierce completion leading to higher spent on trade activities and
promotional support necessitating allocation of more resources.
Formalised process of identifying and assessing business risk; specific
action and monitoring mechanisms were put in place to manage these business risks.
In order to mitigate the risk, your Company has closely monitored
various aspects like cost of the construction, material, time of completion of project
etc. and whenever it has realized to take immediate action, it has given effect to. Focus
on financial discipline including effective management of net working capital has helped
to overcome the above risk and concerns to some extent.
ABOUT MARUTI INFRASTRUCTURE LIMITED:
Maruti Infrastructure Limited (MIL) established in 1994, over last two
decades, MIL has gained a reputable position in construction industry. MIL is specialized
in offering professional construction of management property services in residential,
commercial, Industrial, EWS housing projects and urban infra projects. With many years of
offering good services in the industry, the company is dedicated with competent work force
and a large clientele base for constructions and Infrastructure for both in commercial and
residential sector. Our clients value our allegiance to quality, timely deliveries,
superior customer service and the experience of engaging in business with a highly
qualified and experienced management. By leveraging our strengths and capitalizing on
developing opportunities, we aspire to consolidate our position in the infrastructure
construction and become one of the top Construction Company in Gujarat.
Our success stems from the steely resolve of our young, passionate and
dedicated team of qualified and experienced engineers, supervisors, technicians and
administrative staff. Their expertise enables quick flow of knowledge and efficient
decision making throughout the organization.
During the Financial Year 2022-23, Company had incorporated a
subisidairy Company namely as Karnish Infrastructure Private Limited.
During the year ended on 31st March, 2023, the revenue from
operations of the Company on Consolidated Basis was Rs. 3544.79 Lakhs and net profit for
the current year was Rs 101.35 Lakhs. However on Standalone Basis was Rs 3544.79 Lakhs
compared to Rs. 2583.64 Lakhs of previous financial year and the net profit on Standalone
Basis for the current year was Rs. 126.71 Lakhs compared to Rs. 51.57 Lakhs of the
previous year.
SEGMENT ANALYSIS AND REVIEW:
The Activity of the Company is to provide service of construction/
infrastructure project. Therefore, the Company operates in a single business /
geographical segment. Hence, segment wise performance is not furnished.
FUTURE OUTLOOK:
The Government of India is taking various steps to boost the
infrastructure development in the country. Looking at the huge potential for growth in the
infrastructure sector, your company sees a good outlook for the coming years and the
Company will benefit from the same. At present Company is having around 200 crores
projects in hand which will likely to be completed in next 3 years. Presently Company is
mainly focus on construction EWS housing projects constructed under Pradhan Mantri Awas
Yojana (PMAY) which is constructed for lowered income group section of society to provide
their own houses. Company will also participate in upcoming Bid/ Tender issued by
Ahmedabad Municipal Corporation/ other respective authorities in coming years.
RISK & CONCERN:
The Company is exposed external business risk, internal risk and
financial risk. External business risks arise out of variations in place of construction
material etc. Internal risks cover operational efficiency and ability to withstand
competition. Financial risks are in the nature of interest rate variations.
KEY RATIOS:
The details of changes in the key financial ratios as compared to
previous year are stated below:
| Sr. No |
Ratio |
Financial Year 2022- 2023 |
Financial Year 2021- 2022 |
Change (%) |
Reason significant changes
of 25%or more as compared to previ ous year |
| 1. |
Debtors Turnover (Days) |
178.72 |
152.84 |
16.93% |
During the year Turnover of
ongoing projects has in- creased and therefore the Debtors Turnover has in- creased. |
| 2. |
Inventory Turnover |
0.16 |
0.11 |
37.60% |
Due to increase in Stock as
compared to previous year. |
| 3. |
Interest Coverage Ratio |
0.38 |
2.26 |
(83.19%) |
Due to increase in Finance
cost interest coverage ratio has decreased |
| 4. |
Current Ratio |
1.89 |
2.17 |
(12.78%) |
|
| 5. |
Debt Equity Ratio |
1.51 |
0.95 |
59.22% |
Due to increase in Loan for
Project Purpose amounting to Rs 420 lakhs the Debt eq- uity ratio has gone up. |
| 6. |
Operating Profit Margin (%) |
9.87% |
9.81% |
0.61% |
|
| 7. |
Net Profit Margin (%) |
3.60% |
2.02% |
0.78% |
|
| 8. |
Return on Net-worth |
0.08% |
0.05% |
0.69% |
Net Profit has increase as
compared to Previous year hence it has increased. |
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Internal Control System is designed to prevent operational risks
through a framework of internal controls and processes. The Company has in place adequate
system of internal control which is commensurate with its size and the nature of its
operations. Our internal control system ensures that all business transactions are
recorded in a timely manner, the financial records are complete, resources are utilized
effectively and our assets are safeguarded.
HUMAN RESOURCES, HEALTH AND SAFTY:
The Company continued to have cordial and harmonious relations with its
employees.
Companys major thrust is on training and development aimed at
transmission of information and knowledge through in house, in the job and external
training input resulting into skill development and competency building of employees.
The Board would like to express its sincere appreciation and gratitude
on behalf of all the stakeholders of the Company, who benefit from the hard work of the
employees.
The Company is committed in cultivating a proactive safety culture. We
have implemented work safety measures and standards to ensure healthy and safe working
conditions for all the employees, visitors and customers. The Company has complied with
all the applicable health, safety and environmental protection laws to the extent
applicable.
CAUTIONARY STATEMENT:
Statement in this Management Discussion and Analysis Report detailing
the Companys objective, projections about the future, estimates, expectations or
predictions including, but not limited to, statements about the Companys strategy
for growth, market position and expenditures may be "forward- looking
statements" within the meaning of applicable securities laws and regulations.
Actual results could differ materially from those expressed or implied.
Important factors that could make a difference to the Companys operations include
economic conditions affecting demand / supply and price conditions in the domestic markets
in which the Company operates, Changes in the Government regulations, tax laws and other
statutes or other incidental factors.
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