Meson Valves India Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS REPORT

1. INTRODUCTION:

Our Company was originally incorporated under the name "Sander Meson India Private Limited" under the provisions of the Companies Act, 2013 vide Certificate of Incorporation dated August 18, 2016 issued by the Central Registration Centre for and on behalf of the jurisdictional Registrar of Companies. Subsequently, the name of our Company was changed to "Meson Valves India Private Limited" vide special resolution passed by the shareholders at the Extra Ordinary General Meeting held on April 25, 2019 and a Fresh Certificate of Incorporation pursuant to change of name was issued by Registrar of Companies, Goa, Daman & Diu dated May 15, 2019. Subsequently, the status of the Company was changed to public limited and the name of our Company was changed to "Meson Valve s India Limited" vide Special Resolution passed by the Shareholders at the Extra Ordinary General Meeting of our Company held on April 10, 2023. The fresh certificate of incorporation consequent to conversion was issued on May 04, 2023 by the Registrar of Companies, Goa, Daman & Diu. The Corporate Identification Number of our Company is L29299GA2016PLC012972.

Global Economic Outlook:

The global economy continues to demonstrate resilience, with projections indicating sustained but moderate growth in the near term.

Global growth is expected to stabilize at 3.2% for both 2024 and 2025, according to IMF data. Advanced economies are projected to see a slight acceleration, moving from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025. In contrast, emerging markets and developing economies are anticipated to experience a mild deceleration, slowing from 4.3% in 2023 to 4.2% in both 2024 and 2025.

Inflation Trends:

Global inflation is forecast to decrease, falling from 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in 2025. However, persistent inflationary pressures in the services sector remain a concern, indicating potential challenges in achieving broad-based price stability.

Financial Markets and Labor Dynamics:

Financial markets have responded positively to the prospect of tighter monetary policies, resulting in improved conditions and increased capital flows to many emerging markets. The labor market has shown strength, with robust employment growth across various regions, driven by resilient demand and favorable supply-side factors, including the fading of earlier energy price shocks.

Economic Divergence:

Notable performance gaps between countries have emerged, with some major economies facing fiscal sustainability issues. The pace of economic convergence for middle and lower-income countries has slowed, raising concerns about persistent global economic disparities.

Potential Risks and Opportunities:

Upside risks include the possibility of faster-than-expected inflation declines or productivity boosts from technological advancements like artificial intelligence. Downside risks encompass fiscal sustainability challenges in major economies and the potential for widening global economic disparities.

Policy Implications:

Policymakers face the complex task of fine-tuning monetary policy to ensure a smooth landing for inflation while simultaneously addressing medium-term fiscal consolidation. The implementation of supply-enhancing reforms and the promotion of multilateral cooperation will be vital in tackling global challenges, mitigating the risks of economic fragmentation, and fostering sustainable, inclusive growth.

While the global economy shows signs of stability and gradual improvement, policymakers face a complex balancing act. Addressing inflation, fostering sustainable growth, and reducing economic disparities will require coordinated efforts on both national and international levels. As the economic landscape continues to evolve, adaptability and strategic policy implementation will be crucial in navigating potential headwinds and capitalizing on emerging opportunities.

(Source: World Economic Outlook Report, April, 2024 issued by IMF).

Indias Economic Outlook:

Indias economy is demonstrating remarkable resilience and growth potential in 2024, as evidenced by recent United Nations projections. The UN has significantly revised its growth forecast for India upwards, now predicting an economic expansion of 6.9% in 2024, a substantial increase from the earlier estimate of 6.2%. This upward revision underscores Indias impressive economic performance and positive outlook. The growth momentum is expected to continue into 2025, with a projected growth rate of 6.6%. These figures position India as one of the fastest-growing major economies globally, highlighting its economic strength amidst various global challenges.

When compared to other large developing economies, Indias economic performance stands out prominently. Alongside countries like Indonesia and Mexico, India is benefiting from strong domestic and external demand. This favourable position contrasts sharply with many economies in Africa and Latin America, which are currently grappling with high inflation, elevated borrowing costs, and political instability. Indias ability to maintain robust growth in this global context is a testament to its economic resilience and effective policy measures.

The primary drivers of Indias economic expansion include strong public investment and resilient private consumption. The governments commitment to increasing capital investment while gradually reducing the fiscal deficit exemplifies a balanced approach to economic management. This strategy is yielding positive results, as evidenced by improved labour market indicators and higher labour force participation. These factors contribute to a virtuous cycle of growth, where increased economic activity leads to job creation, which in turn boosts consumer spending and further economic expansion.

Despite the overall positive outlook, its important to note that India faces some challenges. Subdued global demand is affecting overall merchandise exports, which could potentially impact sectors heavily reliant on international trade. However, the strength of domestic factors appears to be offsetting these external pressures, allowing the economy to maintain its growth trajectory.

Looking ahead, Indias economic outlook for 2024 and 2025 remains positive, with steady growth projected and key economic indicators showing improvement. The countrys ability to maintain this growth trajectory will depend on sustained strong domestic demand, effective navigation of global economic challenges, and a continued focus on key growth drivers such as public investment and private consumption. As the global economic landscape continues to evolve, Indias economic performance will be closely watched by investors, policymakers, and economists worldwide, given its increasing importance in the global economic arena. (Source: https://economictimes.indiatimes.com/news/economv/indicators/un-raises-indias-2024-growth-forecast-to-6-9/articleshow/110217077.cmsRsfrom=mdr)

Union Budget 2024-25: Indias Economic Development Fiscal Overview and Macroeconomic Targets:

The Union Budget 2024-25 presents a comprehensive economic strategy aimed at propelling India towards its vision of Viksit Bharat (Developed India). The government has set ambitious yet realistic fiscal targets, with total receipts estimated at ^32.07 lakh crore and total expenditure at ^48.21 lakh crore. A key fiscal goal is to maintain the deficit at 4.9% of GDP, with plans to further reduce it below 4.5% in the subsequent year. This approach demonstrates a balanced stance between growth stimulation and fiscal prudence. Looking ahead, the Interim Budget for FY25 projects a nominal GDP growth rate of 10.5% and aims for a fiscal deficit of 5.1%. Total government spending is set to increase by 6% to ^47.65 lakh crore, with a notable 17% rise in capital expenditure, reflecting the governments commitment to infrastructure development and economic growth.

Human Capital Development and Employment Initiatives:

A standout feature of this budget is its robust focus on human capital development. The Prime Ministers package of employment and skilling schemes is a cornerstone initiative, targeting 4.1 crore youth over five years. This multi-faceted approach includes salary support for first-time employees, job creation incentives in manufacturing, employer support schemes, a new centrally sponsored skilling program, and an ambitious internship program involving top companies. These measures collectively address the critical issues of employability and skill development in a rapidly evolving job market, potentially creating a more competitive workforce.

Agricultural Modernization and Sustainability:

The agricultural sector, crucial to Indias economy and food security, receives significant attention with an allocation of Rs1.52 lakh crore. Key initiatives include the introduction of 109 high-yielding and climate-resilient crop varieties, promotion of natural farming among 1 crore farmers, establishment of 10,000 bio-input resource centers, and implementation of Digital Public Infrastructure for Agriculture. These measures indicate a strategic shift towards sustainable and technologically advanced agricultural practices, aimed at enhancing productivity and resilience in the face of climate change.

Industrial Growth and MSME Support:

The budget introduces several measures to boost the industrial sector, with a particular focus on MSMEs. These include a new credit guarantee scheme, enhanced Mudra loan limits, establishment of E-Commerce Export Hubs, and the Critical Mineral Mission and offshore mineral mining plans. These initiatives, coupled with tax reforms and GST structure simplification, aim to create a more conducive environment for business growth and enhance Indias international competitiveness.

Infrastructure and Regional Development:

Infrastructure development remains a cornerstone of the budget, with an unprecedented allocation of Rs 11,11,111 crore (3.4% of GDP) for capital expenditure. This investment spans various sectors including urban development, housing, energy transition, and transportation networks. The budget also addresses regional disparities through targeted initiatives for the North-Eastern region, Bihar, Assam, and other states, promoting balanced growth across the country.

Innovation and Research Focus:

The budget demonstrates a strong commitment to fostering innovation and research through the operationalization of the Anusandhan National Research Fund, creation of a Rs1 lakh crore financing pool for private sector-driven research, and allocation of Rs1,000 crore for a new venture capital fund in the space economy sector. These allocations signal Indias ambitions in high-tech industries and space exploration, potentially positioning the country as a global innovation hub.

Overall, the Union Budget 2024-25 presents a comprehensive and forward-looking approach to Indias economic development. It strategically balances immediate economic needs with long-term growth objectives, addressing key sectors while emphasizing social welfare, infrastructure development, and technological advancement. Through its focus on employment generation, skill development, and support for MSMEs, coupled with substantial tax reforms and prudent fiscal management, this budget aims to position India firmly on the path to becoming a developed nation. However, the success of these initiatives will depend on effective implementation and the governments ability to navigate potential global economic headwinds.

(Source: https://pib.gov.in/PressReleasePage.aspxRsPRID=2035609,

https://sbi.co.in/documents/13958/36530824/020224-Interim+Budget+2024-25_SBI+Analysis.pdf/3a3ed79a-e0e3-deb5-2445-9ad50c521844Rst=1706852535487#:~:text=For%20FY25%2C%20the%20Government%20has,to%20Rs%20 3.8%20lakh%20crore. , https://www.indiabudget.gov.in/budget2024-25(I)/index.php)

Global Industrial Valves Market Overview Market Size and Growth

The global industrial valves market has demonstrated remarkable growth in recent years, reaching a substantial value of US$ 73.7 Billion in 2023. This upward trajectory is expected to continue, with projections indicating that the market will expand to US$ 128.6 Billion by 2032. This growth represents a compound annual growth rate (CAGR) of 6.2% during the period 2024-2032, underscoring the robust nature of the industry and its significant potential for further expansion.

Key Market Drivers

The growth of the industrial valves market is propelled by several interconnected factors. Rapid industrialization and infrastructure development across the globe are primary drivers, as countries strive to enhance their economic activities and meet the demands of growing populations. This trend has led to a substantial increase in the establishment of industrial facilities, power plants, and water treatment facilities, all of which require advanced and efficient industrial valves.

Concurrently, there is an increasing focus on energy efficiency and sustainability in industrial processes. This shift is driven by both environmental concerns and the need to reduce operational costs. As a result, industries are adopting valve technologies that promote efficiency in fluid handling processes, contributing to overall energy conservation and reduced environmental impact.

Technological advancements and innovation play a crucial role in shaping the market landscape. Manufacturers are investing heavily in research and development to introduce new product variants with enhanced features, improved performance, and extended lifespan. The integration of digital technologies, such as the Industrial Internet of Things (IIoT) and smart control systems, is leading to the development of innovative valves offering real-time monitoring and predictive maintenance capabilities.

Industry Applications and Geographical Trends

Industrial valves find critical applications across a wide range of sectors, including oil and gas, power generation, pharmaceuticals, water and wastewater treatment, and chemical processing. The diverse needs of these industries contribute significantly to market expansion and drive technological innovation in valve design and functionality.

Geographically, the Asia Pacific region is experiencing significant demand growth due to rapid industrialization and infrastructure development initiatives. However, other regions such as Europe, North America, Latin America, the Middle East, and Africa also exhibit unique trends influenced by factors like environmental regulations and specific industry activities. This global demand distribution underscores the widespread relevance and necessity of industrial valves across various markets and industries.

Emerging Market Trends

A notable trend in the industrial valves market is the shift towards eco-friendly and sustainable solutions. This aligns with the growing emphasis on environmental responsibility in industrial processes and is driven by both regulatory pressures and corporate sustainability initiatives. Manufacturers are developing valve technologies that minimize environmental impact while maintaining high-performance standards.

The integration of smart technologies into valve systems represents another significant trend. Smart valves, equipped with sensors and connected to digital networks, offer benefits such as real-time monitoring, remote control, and predictive maintenance capabilities. This trend is reshaping operational efficiency and maintenance practices across industries.

Globalization and cross-border investments are also influencing market dynamics. As industries expand their operations globally, there is an increasing demand for standardized and reliable fluid control systems. This trend is particularly evident in sectors such as oil and gas, petrochemicals, and water infrastructure, where multinational companies seek to establish a global presence and optimize their supply chains.

Market Outlook and Opportunities

The industrial valves market presents numerous opportunities for growth and innovation. Continuous technological advancements, expanding applications across various industries, and the potential for strategic collaborations and acquisitions offer avenues for market players to enhance their competitive position and market presence.

However, the market also faces challenges, including the need to address stringent industry regulations and standards, and ensuring the reliability and safety of valves in diverse and often harsh operating environments. Overcoming these challenges will be crucial for sustained growth and innovation in the industrial valves sector.

(Source :https://www.imarcgroup.com/industrial-valves-market#:~:text=The%20global%20industrial%20valves%20market,6.2%25%20during%202024%2D2032)

The India Industrial Valves Market is poised for significant growth in the coming years. As of 2024, the market size is estimated at USD 2.41 billion, with projections indicating it will reach USD 3.38 billion by 2029. This represents a compound annual growth rate (CAGR) of over 7% during the forecast period of 2024-2029.

The market is segmented by various factors, including valve type (butterfly, ball, globe, gate, plug, and others), product (quarter-turn, multi-turn, and other products), and application (power, water and wastewater management, chemicals, oil and gas, and other applications). This diverse segmentation reflects the wide range of industries and uses for industrial valves in India.

While the COVID-19 pandemic initially had a negative impact on the market due to government restrictions and slowdowns in key sectors like oil and gas, power, and chemicals, the market has since shown strong recovery. This rebound is attributed to increasing consumption of industrial valves in water treatment, oil and gas, chemical, and power applications.

Several factors are driving the growth of the India Industrial Valves Market. These include rising demand from water treatment plants, the oil and gas industry, and the power sector. However, challenges such as high costs and the need for regular maintenance of valves may potentially restrain market growth.

Despite these challenges, the market shows promise for future expansion. A notable trend is the increasing demand for automatic valves, which is expected to create lucrative growth opportunities in the coming years.

Overall, the India Industrial Valves Market is demonstrating resilience and adaptability in the face of past challenges, with strong growth projections for the future. The diverse applications and ongoing technological advancements in valve systems suggest a dynamic and evolving market landscape through 2029.

Indias

Defence Industry Overview

India has emerged as a formidable force in the global defence arena, solidifying its position as the worlds fourth- largest military spender. With a robust defence budget of $74.7 billion in 2024, the nation demonstrates an unwavering commitment to modernizing its armed forces and fortifying national security. This substantial investment not only reflects Indias strategic importance on the world stage but also underscores its resolve to address complex regional security challenges and assert its geopolitical influence. The Indian defence industry boasts a diverse and sophisticated portfolio encompassing a wide array of segments. These include advanced military aircraft, state-of-the-art naval vessels, cutting-edge missile systems, and modern land vehicles.

Make in India Initiative and Export Growth

The "Make in India" initiative has been a transformative catalyst for the defence sector, revolutionizing the industrys landscape. This visionary program aims to reduce import dependence drastically while nurturing a robust domestic manufacturing ecosystem. The fruits of this labor are evident in the remarkable export growth, with defence exports surging to $2.63 billion in FY2023-24, marking an impressive 32.5% year-over-year increase. Indias defence products now reach over 85 countries, a testament to their quality and competitiveness. With an ambitious target of $5 billion in annual defence exports by 2025, India is poised to become a major player in the global defence export market.

Government Initiatives and Policy Support

The Indian government has orchestrated a symphony of initiatives to foster growth and innovation in the defence industry. These include setting an audacious target of $25 billion in defence production by 2025, liberalizing foreign direct investment policies to allow 74% FDI through the automatic route, and establishing two strategic Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu. Innovative programs like the Innovations for Defence Excellence (IDEX) and the Technology Development Fund (TDF) scheme are nurturing a new generation of defence startups and driving cutting-edge research. These initiatives collectively create a fertile ground for technological advancement and industrial growth in the defence sector.

Investments and Recent Developments

The sector has witnessed a flurry of investments and groundbreaking developments. These include the successful testing of indigenous missile systems like Agni-Prime and naval platforms such as INS Vikrant, Indias first homegrown aircraft carrier. Strategic partnerships between defence PSUs and premier academic institutions are fostering a culture of research and innovation. The increased participation of private sector companies and dynamic startups is injecting fresh ideas and agility into the industry, accelerating the pace of technological advancement and manufacturing capabilities.

Outlook and Future Prospects

Driven by persistent regional tensions, a steadfast governmental push for self-reliance, and burgeoning opportunities in frontier technologies like artificial intelligence, robotics, and unmanned systems, the sector is poised for exponential growth. The anticipated surge in private sector and startup participation, coupled with the potential for increased international collaborations and technology transfers, paints a picture of a vibrant, innovative, and globally competitive Indian defence industry in the years to come.

Challenges and Way Forward

While the outlook is optimistic, the path forward is not without hurdles. The sector grapples with challenges such as the need for sustained and substantial R&D investments, the imperative to streamline often cumbersome procurement processes, and the crucial task of enhancing skill development to meet the industrys evolving requirements. To surmount these challenges and fully capitalize on the myriad opportunities, India must double down on fostering innovation, fortify its domestic supply chain, intensify collaboration between academia, industry, and defence forces, and focus on developing niche technologies that can give it a decisive edge in the global market. India is well-positioned to not only enhance its strategic autonomy but also to emerge as a global powerhouse

(Source: https://www.ibef.ors/industry/defence-manufacturins)

Indias Oil and Gas Industry Overview

Indias oil and gas sector is a crucial component of the nations economy, ranking among the eight core industries. As the worlds third-largest oil consumer, Indias energy demand is closely tied to its economic growth. The sector has attracted significant domestic and foreign investment, with major players like Reliance Industries Ltd and Cairn India operating in the market.

As of July 2023, Indias oil refining capacity stood at 253.92 million metric tons per annum (MMTPA), making it Asias second-largest refiner. Crude oil production reached 29.4 MMT during April-March 2024, while High- Speed Diesel accounted for 38.6% of petroleum product consumption in FY23. The countrys focus on cleaner energy is evident in its LNG imports, which stood at 30,917 million metric tonnes (MMSCM) between April 2023 - March 2024.

Investments and Recent Developments

The oil and gas sector in India has been a hotbed of investment activity and technological advancements. Foreign Direct Investment (FDI) inflows have been substantial, reaching US$ 8.19 billion between April 2000 and March 2024, demonstrating strong international confidence in Indias energy market. The countrys infrastructure continues to expand, with crude pipeline networks extending to 10,941 kms and boasting a capacity of 153.1 MMTPA as of May 1, 2024.

The retail landscape has seen significant growth, with the total number of Oil Marketing Company (OMC) retail outlets surging to 90,165 by May 1, 2024. This expansion enhances accessibility and distribution efficiency across the nation. Looking ahead, industry experts anticipate a production peak for Indias oil and gas sector between 2023 and 2032, with 2027 marked as a potential pinnacle year.

Government Initiatives

In a landmark move, February 2024 saw the unveiling of a colossal US$ 67 billion investment plan for the Indian gas sector, set to unfold over the next 5-6 years.

Recognizing the impact of global oil price fluctuations on the domestic economy, the government implemented a significant reduction in excise duty on petrol and diesel in May 2022. This consumer-friendly move aimed to alleviate the financial burden on citizens and businesses alike. In the same year, the government demonstrated its commitment to sustainable energy by revising the Biofuel Policy, accelerating the target for 20% ethanol blending with petroleum from 2030 to 2025-26.

The governments push for domestic exploration and production is evident in the launch of the ninth bid round under the Open Acreage Licensing Policy (OALP) in 2022. This initiative opens up new opportunities for investors and aims to boost Indias domestic oil and gas output. Additionally, the approval of oil and gas projects worth Rs. 1 lakh crore in Northeast India in September 2021 reflects the governments focus on regional development and energy security.

To attract more foreign investment and expertise, the government allowed 100% foreign direct investments (FDIs) under the automatic route for oil and gas Public Sector Undertakings (PSUs) in July 2021. This policy change is expected to bring in advanced technologies and global best practices to the Indian oil and gas sector, further enhancing its efficiency and competitiveness on the world stage.

Future Outlook

The future of Indias oil and gas sector appears promising, with projections indicating substantial growth across various segments. Crude oil consumption is expected to witness a robust Compound Annual Growth Rate (CAGR) of 4.59%, potentially reaching 500 million tonnes by FY40 from 223.0 million tonnes in FY23. In terms of daily consumption, forecasts suggest an increase from 4.05 million barrels per day (MBPD) in FY22 to an impressive 9.2 MBPD by 2050, highlighting the sectors expanding role in fueling Indias economic engine.

Natural gas is poised to play an increasingly significant role in Indias energy mix, with consumption projected to grow at a remarkable CAGR of 12.2%, reaching 550 Million Cubic Meters Per Day (MCMPD) by 2030 from 174 MCMPD in 2021.

The refining sector is set for substantial expansion, with Indian refiners planning to add 56 million tonnes per annum (MTPA) by 2028, elevating the domestic capacity to 310 MTPA. Even more ambitiously, India aims to double its oil refining capacity to 450-500 million tonnes by 2030, positioning itself as a global refining hub.

These growth projections are underpinned by Indias rapid economic expansion, increasing urbanization, and rising energy demand. The countrys share in global primary energy consumption is expected to double by 2035, cementing Indias position as a key player in the global energy market.

(Source:https://www.ibef.org/industrv/oil-gas-india)

Indian Shipbuilding Industry

Overview

The Indian shipbuilding industry is poised for remarkable growth in the coming years. According to industry projections, the sector valued at USD 90 million in 2022 is expected to reach a staggering USD 8,120 million by 2033, exhibiting an exceptional Compound Annual Growth Rate (CAGR) of 60%.

Government Support

The Indian governments policy initiatives, such as the Scheme for Financial Assistance to Shipyards (SFAS) and the focus on developing indigenous shipbuilding capabilities, are actively propelling the growth of the shipbuilding sector.

Strategic Location

Indias vast coastline and proximity to major shipping routes present a natural advantage for its shipyards, reducing transportation costs and turnaround times.

Favourable Labour Costs

Compared to other shipbuilding nations, India offers a competitive edge with lower labour costs, attracting international clientele.

Focus on Niche Segments

Indian shipyards are carving a niche for themselves in specialized vessel categories, such as offshore support vessels, further driving the industrys expansion.

SWOT Analysis: Assessing the Competitive Landscape

Strengths:

- Access to skilled and affordable labor.

- Prime location with proximity to major shipping routes.

- Government support through subsidies and infrastructure investments.

- Increasing proficiency in specialized shipbuilding sectors.

Weaknesses:

- Reliance on imported technology for advanced shipbuilding projects.

- Volatility in global steel prices affecting construction costs.

- Scarcity of financing options for local shipyards.

Opportunities:

- Growing demand for new vessels fuelled by the expansion of global trade.

- Government policies fostering domestic shipbuilding capabilities.

- Emphasis on green shipbuilding technologies for sustainable vessels.

- Potential to penetrate export markets and increase global market share.

Threats:

- Fierce competition from leading shipbuilding nations like China and South Korea.

- Geopolitical risks impacting global trade and shipbuilding activities.

- Fluctuating fuel prices affecting operational costs for shipping companies.

India Water and Wastewater Treatment (WWT) Technology Market Overview

Market Size and Growth

The India Water and Wastewater Treatment Technology Market is poised for significant growth. In 2024, the market size is projected to be USD 1.02 billion and is expected to reach USD 1.71 billion by 2029, exhibiting a robust compound annual growth rate (CAGR) of 10.78% during the forecast period (2024-2029).

Market Drivers

As industrial activities and urbanization intensify, the demand for effective water and wastewater treatment technologies becomes critical. Additionally, the growing awareness and need for sustainable water management solutions are propelling market expansion.

Market Challenges

The high cost of establishing water treatment plants remains a significant hurdle for market growth. These costs can deter investment and slow down the adoption of advanced water treatment technologies, especially in cost- sensitive regions and industries.

Opportunities in Innovation

Innovations in water treatment technologies present lucrative opportunities for market growth. Advances in treatment methods, including oil/water separation, suspended solids removal, and biological treatment, are expected to enhance efficiency and reduce costs, thereby driving the adoption of these technologies across various sectors.

Market Trends

Dominance of Treatment Equipment

This category includes technologies for oil/water separation, suspended solids removal, dissolved solids removal, biological treatment, and disinfection/oxidation. Indias significant coal production necessitates extensive wastewater treatment, particularly using clarifiers and disposable filtration equipment to manag( suspended solids. Although the COVID-19 pandemic disrupted mining production and the adoption of nev equipment in 2020, the long-term need for water treatment in this sector remains strong.

Water Scarcity and Industrial Demand

India faces a looming water crisis, with demand projected to exceed supply by two times by 2030. This severe scarcity is expected to drive the need for advanced water treatment systems for both industrial and residentia use. Major industries, such as municipal wastewater treatment, food and beverage manufacturing, and chemica effluent management, are increasingly adopting anaerobic biological treatment equipment due to rising awareness and regulatory pressures.

Government Initiatives

Government initiatives, such as the Swachh Bharat Mission-Urban 2.0, underscore the importance of water an< wastewater treatment. Significant funding allocations from the Indian government and other sources, including corporate social responsibility (CSR) contributions and external assistance, are dedicated to improving wate treatment infrastructure and capabilities across the country.

Environmental Regulations

Stringent environmental regulations, particularly in industries like zinc production, are influencing the adoptioi of water treatment technologies. While increased consumer demand for zinc is driving production, compliance with environmental standards necessitates advanced treatment solutions to mitigate the impact of effluents thereby promoting the growth of the water treatment market.

Overall, the India Water and Wastewater Treatment Technology Market is set to grow significantly, driven by the urgent need for sustainable water management solutions, innovation in treatment technologies, ane supportive government policies.

(Source: https://www.mordorintelligence.com/industry-reports/india-water-and-wastewater-treatment-wwt-technology-market)

Power Sector Overview

India stands as the third-largest producer and consumer of electricity worldwide, boasting an installed power capacity of 442.85 GW as of April 30, 2024. Power is a critical component of infrastructure, essential for the economic growth and welfare of any nation. The existence and development of adequate power infrastructure are vital for the sustained growth of the Indian economy. The fundamental principle of Indias power industry is to provide universal access to affordable power in a sustainable manner. Significant efforts by the Ministry of Power over the past few years have transformed India from a country with a power deficit to one with a surplus, achieved through the establishment of a single national grid, fortifying the distribution network, and achieving universal household electrification.

Developments and Investments

Indias power sector is one of the most diversified globally, encompassing conventional sources like coal, lignite, natural gas, oil, hydro, and nuclear power, as well as non-conventional sources such as wind, solar, agricultural, and domestic waste. The rapid increase in electricity demand necessitates massive additions to the installed generating capacity. As of January 31, 2024, Indias installed renewable energy capacity (including hydro) stood at 182.05 GW, representing 42.3% of the overall installed power capacity. India has been proactive in attracting investments in its power sector. Total FDI inflows in the power sector reached US$ 18.28 billion between April 2000 and March 2024. Major investments have been made in renewable energy, with significant projects in solar, wind, and hydroelectric power.

Government Policies and Initiatives

The Government of India has recognized the power sector as a key area to promote sustained industrial growth. Numerous initiatives have been implemented to boost the sector, including the PM-Surya Ghar: Muft Bijli Yojana, aiming to install rooftop solar systems and provide free electricity up to 300 units per month to one crore households. The Union Budget for 2024 allocated 50% more funds to power sector initiatives, focusing on green hydrogen, solar power, and green-energy corridors. The government has also launched the Production Linked Incentive Scheme on ‘National Programme on High Efficiency Solar PV Modules with an outlay of Rs. 19,500 crore (US$ 2.47 billion). Additionally, projects like the Green Energy Corridor facilitate renewable power evacuation and reshape the grid for future needs.

Future Outlook

The Indian electricity sector is poised for significant transformation in the current decade (2020-2029) concerning demand growth, energy mix, and market operations. India aims to ensure reliable access to sufficient electricity for all, while accelerating the clean energy transition by reducing reliance on fossil fuels and increasing the share of renewable energy sources. The government plans to establish a renewable energy capacity of 500 GW by 2030. Future investments will benefit from strong demand fundamentals, policy support, and an increasing government focus on infrastructure. The Central Electricity Authority (CEA) estimates Indias power requirement to grow to 817 GW by 2030, with renewable energy generation expected to rise from 18% to 44% by 2029-30, while thermal energys share is anticipated to decrease from 78% to 52%.

https://www.ibef.org/industrv/power-sector-india

Company Overview Snapshot

20+ Years of Experience 25+ Products available Rs 40+ Crore Current Order Book 01 Operational Unit 34,000 sq. ft. Manufacturing Unit Spread Across

Established in 2016, Meson Valves India Limited specializes in the assembly, manufacturing, procurement, distribution, and servicing of valves, actuators, strainers, and remote control systems across a variety of industries. Recognized globally as "The Valve Specialists," excels in designing, manufacturing, and supplying a comprehensive range of valves in both ferrous and non-ferrous materials.

Our primary focus is on B2B clients in the marine, offshore, oil and gas, power, and refinery sectors. Our diverse product range caters to the specific needs of these sectors, supporting key players in the value chain and offering prospective clients opportunities for growth and innovation.We prioritize client satisfaction and aim to build lasting partnerships through our innovative and high-quality products.

Operating from a cutting-edge assembling unit in Bhamboli, Pune, we ensures the highest quality standards through advanced CNC machines and testing equipment. Our ISO certifications further reflect our dedication to excellence in the design, development, manufacturing, and servicing of all products.

Product Offerings

Our extensive product line includes valves, actuators, strainers, and remote control systems, designed to meet the diverse needs of various industries. We provide solutions that enhance efficiency and reliability, ensuring our clients achieve optimal performance in their operations.

Services

In addition to our product offerings, we also provide comprehensive installation and maintenance services. These services are designed to ensure the optimal performance and longevity of our products, supporting our clients operational efficiency and reliability.

Business Highlights During the Year

o Secured two significant orders from Garden Reach Shipbuilders & Engineers Limited, valued at approximately Rs4.12 crore. These orders pertain to the supply of B & D spares for hull valves and underwater valves.

o Announced the formation of Nibe Meson Naval Limited, a joint venture in which Meson Valves India Limited holds a 48.95% stake. This new entity will specialize in turnkey projects for piping systems, encompassing assembly, procurement, distribution, and commissioning.

o Received an international order from KW Engineering Solutions Pvt Ltd, valued at approximately Rs7.03 crore. This order includes high-end technology products such as remote-operated triple offset butterfly valves, highlighting Meson Valves India Limiteds expertise in niche, high-tech products.

o Secured a license agreement with Georg Schunemann Gmbh of Bremen, Germany. This agreement authorizes Meson Valves India Limited to utilize essential expertise regarding filters, manufactured products, and inserts, with the additional benefit of technical assistance from Georg Schunemann GmHH.

o Incorporated H2O Dynamics India Limited as a subsidiary, holding a 63.70% share. H2O Dynamics specializes in industrial wastewater treatment systems suitable for various industries, including food and beverage, automotive, mining, pharmaceutical, petrochemical, and power.

o Additionally, Milindpra Castings Private Limited was incorporated, focusing on metal casting and foundry operations. Meson Valves India Limited holds a substantial stake in this company, enhancing our capabilities in the manufacturing sector.

Utilization Summary of IPO Funds

Strategically allocated IPO funds to support its growth and operational efficiency.

o Investment in plant and machinery for the manufacturing unit setup saw Rs9.02 crore deployed by March 31, FY24, with an additional Rs2.36 crore planned for FY 2024-25. o Funding for working capital requirements utilized Rs9.00 crore by March 31, FY24, with a further Rs2.95 crore planned for FY 2024-25.

o Funds allocated for general corporate purposes were fully deployed by March 31, FY24, totalling Rs7.26 crore.

Threats and Challenges

The valve and actuator market is characterized by intense competition, requiring continuous innovation and investment in research and development. Rapid technological advancements necessitate ongoing upgrades to maintain a competitive edge. Supply chain disruptions, often influenced by geopolitical tensions, trade restrictions, and logistical challenges, pose significant risks. Compliance with stringent industry regulations demands substantial resources. Economic volatility can impact demand for our products and services, while fluctuations in raw material costs, particularly metals, can affect profit margins. Attracting and retaining a skilled workforce is crucial for maintaining our standards of quality and innovation.

Internal Control Systems and their Adequacy:

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The highlight of the financial performance of the Company for the year ended March 31, 2024 is summarized as follows:

Particulars	FY 2023-24	FY 2022-23
Revenue from Operations	6,314 46	3665 05
Other Income	17.81	54 26
Total Income	6332.27	3719.30

 

Particulars	FY 2023-24	FY 2022-23
Revenue from Operations	6,314 46	3665 05
Other Income	17.81	54 26
Total Income	6332.27	3719.30
Cost of Material Consumed	1703 65	2520 85
Purchase of Stock-m-trade	2305 55	0. 00
Changes In Inventories	-202 52	-88.61
Employee Benefits Expenses	427.35	265 73
Financial Cost	86.89	89.10
Depreciation and amortisation expenses	116.11	45 51
Other Expenses	603.22	271 .71
Total Expenses	5040.26	3104.27
Profit/(Loss) before Tax	1292.01	615.03
Less: Exceptional items	-	-
Profit/(Loss) before Tax	1292.01	615.03
Provision for Taxation (Net)	386.74	168.29
Profit/(Loss) after tax	905.27	446.74
Other Comprehensive income for the financial year	-	-
Total Comprehensive income/(loss) for the financial year	-	-
Earnings per Equity Share ( ) - Face value of 10/- each	10.38	6 45

Material Developments in Human Resources / Industrial Relations front, including number of People Employed:

Your Company follows a policy of building strong teams of talented professionals. People remain the most valuable assets of your Company. The Company recognizes people as its best employees and the Company has kept a sharp focus on Employee Engagement. The Companys Human Resources is commensurate with the size, nature, and operations of the Company.

DETAILS OF KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Description	As at March 31, 2024	As at March 31, 2023	Variance	Remark
Current Ratio	3.58	1.74	83.34%	Due to increase in working capital caused the ratio to increase.
Debt-Equity Ratio	0.09	0.61	-151.46%	Increase in shareholders equity due to increase in net profit caused the ratio to decline.
Debt Service Coverage Ratio	17.21	8.48	773%	Due to increase in returns of Equity shareholders and borrowing remaning same
Return on Equity Ratio	0.23	0.43	-20.19%	-
Inventory turnover ratio	2.79	2.14	-35%	Due to growth in Companys market share there is increase in sales
Trade Receivables Turnover Ratio	2.51	2.84	-33%	Increase in net credit sales with simultaneous increase in average trade receivables caused the ratio to increase.
Trade payables Turnover Ratio	2.30	2.86	-56.45%	Increase in net credit purchases with a decrease in average trade payables made the ratio to increase.
Net Capital turnover ratio	2.10	3.07	-97.47%	Due to increase in working capital caused the ratio to increase.
Return on Capital employed	0.21	0.24	-2.92%	Due to increase in Earnings of Company in FY 24

Forward-Looking Statement:

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, any epidemic or pandemic, and natural calamities over which we do not have any direct/indirect control.

Cautionary Statement:

This report contains forward- looking statements based on the perceptions of the Company and the data and information available with the company. The company does not and cannot guarantee the accuracy of various assumptions underlying such statements and they reflect Companys current views of the future events and are subject to risks and uncertainties. Many factors like change in general economic conditions, amongst others, could cause actual results to be materially different.

For and on behalf of the Board

Meson Valves India Limited

Sd/-

Swaroop Raghuvir Natekar

Whole Time Director

DIN - 05154850

Place: Goa

Date: 06-09-2024