Nirav Commercials Ltd Management Discussions.
Industry sector and development
Your Company is engaged in manufacturing of Aluminium Grills, Doors & Windows and has two manufacturing units namely Elesar Focchi, one of them is situated at Daman (UT) & another at Taloja, Dist; Raigad (Maharashtra).
The real estate sector is one of the most globally recognized sectors. Real estate sector comprises four sub sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13 per cent of the countrys GDP by 2025. The Government of India along with the governments of the respective states has taken several initiatives to encourage the development in the sector. The Smart City Project, where there is a plan to build 100 smart cities, is a prime opportunity for the real estate companies. It means demand of your Company products i.e. aluminium doors & windows for real state sector will continue. Our analysis of proposed / on-going projects indicates that there would be a strong order inflow in this sector.
The Company operates in a highly competitive environment, significant investments are planned by the Government of India, there has always been a lag in the planned investments and in the actual implementation and execution of those investments and that may impact performance of the Company. Also the real estate market is presently not in a good shape.
Your Company is in single segment of manufacturing of Aluminium Doors & Windows and trying to increase its revenue.
The government initiating investments in the real estate sector there seems to be a positive outlook for our products.
Risk and concern
The Company recognises that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. As always, volatility in the price of aluminium will affect the performance of the Company.
Internal control system and their adequacy
Manufacturing unit of the Company namely Elesar Focchi, is an ISO 9001: 2015 certified unit. Your Company has a real time system of monitoring its targets as well as expenditure.
Your Company has constantly trying to increase its sales as well as profitability.
Development in human resource / industrial relations
The company places high importance on the development of its human resources. It imparts regular training to its employees to make them more focused to adapt to the constant change in the business environment. Industrial relation in the units was satisfactory.
Key Financial Ratios
The company has identified the following as key financial ratios:
|1 Debtors Turnover Ratio||14.95%||9.11%|
|2 Inventory Turnover||46.72%||19.22%|
|3 Interest Coverage Ratio||5.04%||0.09%|
|4 Current Ratio||984.04%||905.00%|
|5 Debt Equity Ratio||8.70%||9.43%|
|6 Operating Profit Margin (%)||2.56%||56.02%|
|7 Net Profit Margin||2.59%||44.80%|
|8 Change in Net Worth as compare to previous year||0.88%||60.76%|