Natural Capsules Ltd Management Discussions.

1.Industry structure and developments:

Pharma Industry in India has grown by about 12% during the year, Mainly due to significant growth of 19% in exports. Domestic sales though increased by about 6%, were affected during the first quarter of the year due to lock down in the country. As uncertainty due to covid-19 still continue to persist, pharma industry is expected to do well in coming years. Indian exports to U.S and Europe are expected to do well in view of anti China sentiments prevailing in those countries. Further, Domestic consumption in China and Logistics delay from China are also giving a boost to Indian exports to Latin America and African countries.

Opportunities and threats:

a) Opportunities

1. Opening of export opportunities for capsules in various countries, where demand has grown significantly due to lesser competition from china.

2. Increase in demand for capsules within the country due higher spend on health sector by GOI.

3. New dosage formulations using hard capsules. New Covid drugs are being introduced in capsule forms.

4. Companys new API project will market products which are currently being imported and hence will have good demand and margins.

b) Threats:

1. Aggressive expansion and price competition from Chinese and some other large domestic manufacturers.

2. Increase in prices of raw material due to short supply in domestic market and higher import costs due to devaluation of Indian currency.

3. Tension between various countries may led to uncertainities in export front.

4. Significant raise in covid related patients may reduce consumption of other drugs

c).Segment wise or product wise performance is not relevant in view of the company having single product.

d).Outlook:

Based on the companys performance up to the date of this report, orders on hand and realizing the incremental capacity post up gradation of machines, your company is hopeful of achieving a turnover of around Rs. 94 Crores in the current year. Due to higher output of updated machines, company is hopeful of achieving a better margins as compared to earlier year. New API project once commissioned will give a big boost to companys revenue and profits.

e). Risks & Concerns

Risk of competition and exchange fluctuations may have an adverse impact on the projections. Risk of delay in receiving payments for both local & international customers can lead to higher finance cost. Risk of short supplies of raw material can cause loss of business to some extent.

f). Discussions on financial performance with respect to operational performance:

The Net Sales During the year was Rs. 7951. 34 Lakhs and your company could make Net Profit of Rs. 694. 70 Lakhs after tax.

2. Disclosure of Accounting in case of different from the prescribed Accounting Standards: No deviation

Management Discussion and Analysis: (in Lakhs except %
Rate)
(h) Material developments in Human Resources / Industrial Relations front, including number of people employed. N.A
(i) details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including: N/A
(i) Debtors Turnover 1.97
(ii) Inventory Turnover 4.74
(iii) Interest Coverage Ratio 2.78
(iv) Current Ratio 2.10
(v) Debt Equity Ratio 1.23
(vi) Operating Profit Margin (%) 3.15
(vii) Net Profit Margin (%)
or sector-specific equivalent ratios, as applicable. 3.21
NIL
(j) details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof
(j) the amounts, if any, which it proposes to carry to any reserves; NIL
Other Disclosures:
(k) total fees for all services paid by the listed entity and its subsidiaries, on a consolidated basis, to the statutory auditor and all entities in the network firm/network entity of which the statutory auditor is a part.] 3,00,000

Cautionary Statement

The statements in the "Management Discussion and Analysis Report" section describes the Companys objectives, projections, estimates, expectations and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.