Minosha India Ltd Management Discussions

GLOBAL ECONOMY

The last fiscal continued to bear the brunt of COVID-19 flare-ups with new virus variants. However, the momentum of spread of pandemic has slowed and the global economy is recovering with countries eschewing lockdowns in favour of normalcy. However, the reopening has seen labour market tightening and rising inflation exacerbated by escalation in geopolitical tensions. The central banks are unwinding fiscal and monetary support and increasing interest rates. The conflict in Europe, the re-emergence of COVID-19 in China, in addition to the already fluctuating and rising metal and energy costs, supply chain disruptions and inflation across major economies will continue to remain as headwinds for global growth.

INDIAN ECONOMY

The commencement of the fiscal year 2021-22 marked the onset of the second wave of the pandemic in India. Though the effects of the second wave were devastating from a social perspective, the severity of the impact on the economy was more subdued as compared to the previous fiscal. The Indian economy grew by 8.9% in FY22 led by growth in the industrial and services sector. The economy gained momentum during the second quarter of the fiscal as the pandemic induced disruption eased significantly. The economy continued its path of recovery underlined by a marked increase in public sector capex spending, especially infrastructure, robust exports, services sector rebound and improved consumption levels. Rising inflation on the back of supply bottlenecks and increasing fuel prices could act as dampener to growth. Sustained foreign direct investment, large foreign exchange reserves, and rising export earnings will help the Indian economy to sustain growth in the policy tightening phase. The economic sanctions against Russia have further worsened the logistics of air and sea freight.

OUTLOOK & OPPORTUNITY

To maintain sustainable and resilient growth with profitability the Company is augmenting capability building in future. All functional teams have been revamped and new talent has been inducted. A key focus area for growth shall be enrichment of product mix, focusing on shift from volume to value. In addition to enriching the product mix, we will continue to focus on areas like enlarging product basket and deliverables, moving up the value chain through service networks. Leveraging the RICOH distributor agreement and access to the GEM Portal, we are confident of robust growth in the future. The outlook is expected to be a mixed bag of both opportunities and challenges with the key being the Companys adaptability and proactive adjustments to the changing macroeconomic conditions.

THREATS

The slowdown of economic growth, supply chain disruptions, increasing freight cost and risk of escalation of Russia-Ukraine conflict could pose a threat to our growth plans. The continued supply chain disruptions are impacting sales due to our inability to commit on delivery timelines. As demand environment continues to remain stable, we expect healthy sales growth if supply side challenges subside. We have absorbed the inflationary impact on costs as price escalations have been minimal due to competitive pressures. We are seeing competitive price pressure easing in the second half of the current financial year.

SUSTAINBILITY

As a responsible corporate we are focusing on various initiatives to lower our carbon footprint and consumption of natural resources and energy. We have created a Task force across regions to explore and suggest measures to achieve our sustainability goals.

PROJECTS

We have successfully completed and handed over projects to the respective stakeholders. We have chosen to accept extension in one more project. While we have not signed any new project, we continue to evaluate opportunities in this space.