narayani steels ltd share price Management discussions


Managements discussion and analysis of the financial condition and results of operations include forward looking statements based on certain assumptions and expectations of future events. The Company cannot assure that these assumptions and expectations are accurate. Although the Management has considered future risks as part of the discussions, future uncertainties are not limited to Management perceptions.

1. Review of Indian Economy:

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships. Indias nominal gross domestic product (GDP) has touched the $3.75 trillion-mark in 2023. India is the third-largest unicorn base in the world with over 100 unicorns with a total valuation of US$ 332.7 billion. India needs to increase its rate of employment growth and create 90 million non-farm jobs between 2023 and 2030s, for productivity and economic growth according to McKinsey Global Institute. The net employment rate needs to grow by 1.5% per year from 2023 to 2030 to achieve 8-8.5% GDP growth between 2023 and 2030. According to data from the Department of Economic Affairs, as of as of March, 2023, foreign exchange reserves in India reached the US$ 578 4 billion mark. To cushion rupee depreciation, RBI has been intervening in the forex market via both spot and forward positions.

2. Industry Structure and developments:

Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. According to the Department for Promotion of Industry and Internal Trade (DPIIT), FDI equity inflow amount for infrastructure industries in India for the period 2016-2023 was not so good. In the financial year 2023, the infrastructure industries in India saw a foreign direct investment equity inflow of approximately 1.7 billion U.S. dollars. This was a decline compared to the previous years.

3. Strength, Opportunities, Threats Strength:

Established operations and proven track record Smooth flow of operations and Business Model yvvy Experienced Management Team Satisfied customer with quality and service

Opportunities:

yvyyyy Potential to provide other value-added services Expanding new geographical area Enhancing functional efficiency Opportunities in Indian Market

Government thrust for growth in Indian Economy will boost the logistics & Infrastructure Industry

Threats:

Increased Competition from Big Players Change in Government Policies Rising labour wages yyvyy Margins may be constrained in the future

There are no entry barriers in our industry which puts us to the threat of competition from new entrants

4. Segment Wise - Product wise performance:

During the year under review, the Company operated in only one segment which is production of Iron and Steel Products.

Details of Segment wise Revenue of the Company:

e Iron & Steel Products: The Total Revenue from Iron & Steel Products is Rs. 10,709.75/- Lakhs.

5. Outlook

The Continual growth in the Indian sector is necessary to give necessary support to the industry. The company is making all efforts to accelerate the growth of its business. It expects to improve its position in the market by focusing in the technologically advanced andmore profitable and market segment and working aggressively in the area of productivity, efficiency and cost reduction.

6. Risks and Concerns

The Industry is exposed to the following risk and concerns:

e Political instability or a change in economic liberalization and deregulation policies could seriously harm business and economic conditions in India generally and our business in particular.

The Government of India has traditionally exercised and continues to exercise influence over many aspects of the economy. Our business and the market price and liquidity of our Equity Shares may be affected by interest rates, changes in Government policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India. The rate of economic liberalization could change, and specific laws and policies affecting the information technology sector, foreign investment and other matters affecting investment in our securities could change as well. Any significant change in such liberalization and deregulation policies could adversely affect business and economic conditions in India, generally, and our business, prospects, financial condition and results of operations, in particular.

? Global economic, political and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price.

Global economic and political factors that are beyond our control, influence forecasts and directly affect performance. Factors include interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, foreign exchange fluctuations, consumer credit availability, fluctuations in commodities markets, consumer debt levels, unemployment trends and other matters that influence consumer confidence, spending and tourism. Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude, which may negatively affect our stock prices.

e Any downgrading of Indias sovereign rating by an independent agency may harm our ability to raise financing.

Any adverse revisions to Indias credit ratings for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing may be available. This could have an adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures and the trading price of our Equity Shares.

7. Internal Control systems and its 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.

8. Discussion on financial performance of the Company with respect to operational performance. e Share Capital

The Paid-up Share Capital of the Company as on 31% March, 2023 is Rs. 10,89,54,500/- (Rupees Ten Crore Eight-Nine Lakhs Fifty-Four Thousand Five Hundred Only) divided into 1,08,95,450 (One Crore Eight Lakhs Ninety-Five Thousand Four Hundred Fifty) Equity Shares of Rs. 10/- (Rupees Tenonly).

eo Reserves and Surplus

The reserves and surplus is Rs. 5,014.69 Lakhs as on the end of the current year.

eo Total Income

During the year under consideration, the total income was Rs. 11,005.51 Lakhs as against Rs. 1,187.21 Lakhs during the previous year.

9. Material developments in Human resources / industrial Relations front, including number of people employed

Human Resources and an effective and efficient human resource are a key to the success of any organization and our company has been well focused in adopting the best standards in the Industry which not only gives us the benefit of attracting good talent but gives us an edge towards providing best qualitative services to our customers. Our manpower is a mix of experienced and young talent pool of resources which gives us the dual advantage of stability and growth. Our work processes and skilled resources together with our strong management team have enabled us to successfully implement our growth plans.

10. Key Financial Ratios:

Ratios 2022-23 2021-22 Variance (in %)
Current Ratio 42.10 48.34 -12.90%
Debt-Equity Ratio 0.02 0.05 -64.34%
Debt Service Coverage Ratio - 59.94 NA
Return on Equity Ratio 15.17% 1.01% 1406.70%
Inventory turnover ratio 20.45 - NA
Trade Receivables turnover ratio 3.02 0.17 1725.36%
Trade payables turnover ratio 252.47 - NA
Net capital turnover ratio 2.24 0.33 579.52%

Reason for variance: Figures for the Financial Year 2021-22 are after implementation of the approved Resolution Plan whereupon operational & financial liabilities were extinguished and advances, Trade & other receivables were written off and are not comparable with the figures for the current financial year and hence the variance.

11. 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.

Place: Kolkata On behalf of the Board of Directors
Date: 4% September,2023 For DHATRE UDYOG LIMITED
(Formerly known as Narayani Steels Limited)

SD/-

Sumit Kumar Agarwal Managing Director DIN:02184000