Pacific Inds Management Discussions

The Management of Pacific Industries Limited is pleased to present the Management Discussion and Analysis Report, which lucidly explains the Companys business, industry structure, opportunities and concerns, performance of the Company with respect to the operations and other relevant information. Management Discussion and Analysis forms a part of the compliance report on Corporate Governance.

- Global Economy 2023

In 2022, the major economies faced considerable macroeconomic challenges as a result of a geopolitical crisis in Europe and broadening inflationary pressures. Economic growth is being adversely affected by the persistent surge in interest rates by Central Banks to fight inflation and the ongoing food and energy crises in Europe. In CY*2022, growth was dented by the unexpected resurgence of COVID in China. However, the recent border openings have opened the door for a sooner-than-expected recovery. It is likely that global inflation would decelerate from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024 [Source: IMF World Economic Outlook, July 2023]. In the course of 2023, higher growth from pent-up demand in several economies or a quicker decline in inflation are anticipated.Despite the headwinds, the economy is being buoyed by an upswing in household spending and an influx of foreign capital. Amid the ongoing Russia-Ukraine conflict and the synchronised rate hikes by the Central Banks, global growth is expected to slow down to 3.0% in CY*2023, from 3.5% in CY*2022.1 The IMF predicts that India and China will contribute more than half of the global growth in FY23.

- Outlook

The global economy has partially recovered following the easing of inflationary pressures. As a result, going forward, taming inflation is one of the top priorities of policymakers. Central Banks across the globe are endeavouring to strike a balance between supporting economic growth and curbing inflationary concerns. The economys health is expected to improve with proper monetary policy regulation, the resolution of geopolitical conflicts, the mitigation of supply-chain disruptions and effective management of pandemic aftereffects.

- Indian economy

Based on the estimates of the National Statistical Office (NSO), real GDP growth is predicted to be 7.2% in FY2022-2023.3 According to the World Bank, India is expected to be one of the top seven emerging market and developing economies (EMDEs). The pent-up demand for contact-intensive services is a major factor in the 7.7% growth in private consumption that is anticipated for FY23. According to a sectoral analysis, the Central Government and State governments increased capex helped fuel strong building activity, which created numerous employment opportunities. In FY23, the services sector is expected to expand by 9.1%, with contact-intensive services such as trade, hotel accommodations and transportation expected to grow by 13.7%. The growth of the financial, real estate and professional services industries is anticipated to moderate to 6.4%, possibly as a result of the slowdown in credit growth caused by rising interest rates and the slowdown in the demand for software and professional services globally. India is on track to become a USD 3 trillion economy by the conclusion of FY23. Within the next seven years, it is predicted to reach USD 7 trillion. In FY2022, the Indian rupee continued to be one of the least volatile currencies among its Asian counterparts, and it has remained remarkably resilient so far. Seasonally adjusted capacity utilisation rose to 74.5% in Q2 of FY 2022-23, according to the RBI. On the other hand, the drag from net external demand persisted despite a decline in merchandise exports in Q3 of FY2022-23.6

- Outlook

There are early signs that India is prepared for a greater investment upcycle in the industrial and services sectors, even though the post-COVID private investment recovery is still in its early stages. The number of ongoing private investment projects in the industrial sector has been consistently growing over time. The volume of e-way invoices generated, electronic toll collections and sustained rise in GST collections, all point to a positive trend. Manufacturing activity continues to expand gradually, as shown by indicators including the PMI for manufacturing, the Index of Industrial Production and the Index of Core Industries (ICI). Services sector indicators (UPI transactions, high credit demand) also point to additional recovery. Overall, Indias demand environment continues to be favourable for sustaining economic growth. India is confident going into the upcoming fiscal year due to its underlying and overall macroeconomic stability, but it remains vigilant about geopolitical and geoeconomic concerns

- Stone Industry Overview

- Global Granite Stone Industry

The size of the global granite market attained a valuation of USD 17,363.02 million in the year 2021. It is projected to witness growth at a Compound Annual Growth Rate (CAGR) of 3.2%, to reach an estimated value of USD 20,978.75 million by the year 2027.8 In the year 2022, the global granite market encountered several challenges, including inflationary pressures in major global economies and supply chain disruptions resulting from the war in Europe. However, in spite of these global headwinds, the global granite market demonstrated significant growth. The upsurge in demand for granite is primarily driven by its expanded usage in diverse construction applications, such as kitchen countertops, bath vanity tops, backsplashes, and bathroom sinks & basins. The enduring allure of granite for residential purposes, coupled with increased investments in construction projects, has further accelerated the markets growth trajectory. Apart from construction applications, granite finds extensive use in sculpture and memorials, as well as in engineering and other diverse sectors. This multifaceted materials resistance to rust and its ability to retain its colour indefinitely, especially in the context of granite countertops, play pivotal roles in driving the overall market growth.

- Indian Granite Stone Industry

The Indian granite industry has garnered widespread recognition as a major player in the global stone market. Acclaimed for its diverse array of colours, remarkable durability, and intricate patterns, Indian granite commands a prominent status in both the construction and decorative domains worldwide. India stands among the leading producers and exporters of granite, making a substantial contribution to the nations economic expansion. The industry is predominantly concentrated in the southern states of Tamil Nadu, Karnataka, Andhra Pradesh, and Telangana, where abundant granite reserves are found. These regions have become major granite clusters with numerous quarries and processing units, fostering a competitive and thriving business environment. During recent times, the Indian granite industry has encountered various challenges and undergone significant changes. Environmental issues, especially pertaining to sustainable quarrying methods, have spurred the government to implement more stringent regulations to mitigate the environmental impact. Granite quarrying has frequently faced criticism for its potential to induce land degradation and biodiversity loss, thereby prompting the adoption of sustainable mining practices. The Indian granite industry has also adapted to technological advancements, with increased investment in modern machinery and processing units. This has enhanced production capabilities and improved the overall quality of finished granite products, meeting international standards and demands. Despite its strengths, the industry has encountered obstacles like fluctuating international demand, changing global economic conditions, and competition from other granite-producing countries. To remain competitive, Indian granite exporters are continually exploring new markets and diversifying their product offerings.

- Quartz

Quartz is an important material with several functions. Sand, a necessary component of glass manufacturing, is made from tiny quartz stones. There are several uses for quartz rock crystals in electronic devices. It functions as an oscillator for radios, watches, scales and intervention of optics. Sandblasting, breaking glass and cutting delicate stones all use quartz for grating. As major silicon semiconductors are made using quartz, it is mostly employed in the personal computer industry. The expanding sales of various electronic gadgets, such as tablets, phones, desktop computers and laptops, have raised the demand for semiconductors. The global quartz market was worth USD 7.2 billion in CY2022. By CY2028,the market is expected to reach USD 10.4 billion, with a compound annual growth rate (CAGR) of 5.8% between CY2023 and CY2028.9 The rapid development of technology and the widespread use of quartz crystals in the construction of frequency filters, controllers and timers in electronic circuits are fuelling growth in the market. Quartz is also used in the manufacturing of solar cells, which are gaining popularity as renewable energy sources. In the upcoming years, demand for quartz is anticipated to rise as solar energy usage increases. Energy-efficient lighting, such as LED bulbs, is produced using quartz and is gaining popularity as an alternative to conventional incandescent bulbs. Quartz is an important product in this industry since it is necessary for the manufacturing of concrete, tiles and other building materials. It is projected that higher infrastructure investment, particularly in emerging economies, will eventually raise the demand for quartz.

- Countertop market Overview

The global demand for countertops is projected to experience a steady growth rate of 4.3% per year, reaching 711 million square meters in 2027, with an estimated value of $54.6 billion. This growth will be driven by a surge in countertop installations in both residential and non-residential settings, as they continue to be preferred over freestanding or wall-mounted fixtures in kitchens and bathrooms. Furthermore, the demand for countertops will receive a boost from the increasing trend of residential remodelling, where countertop replacement remains one of the most popular and sought-after methods to upgrade kitchens and bathrooms. As a result, the countertop market is expected to witness significant advancements, driven by the demand for improved aesthetics and functionality in various living and commercial spaces. Despite the positive growth outlook for the countertop market, there are certain factors that may restrain further gains. Weak new housing outlooks in key regions such as the US, China, Japan, South Korea, and Europe are expected to limit the expansion of the market. Furthermore, there is a possibility of a deceleration in the global market value through 2027. This is primarily attributed to the unusually high price levels experienced in 2022, which were influenced by inflationary pressures. As a result, the countertop market may face challenges in sustaining the same rate of growth as in previous years.

- Outlook for Granite and Quartz Surface

The projected growth of global demand for engineered stone countertops is estimated at a robust 9.3% per year, reaching 128 million square meters by 2027. Engineered stone has experienced rapid expansion in its share of the global countertop market, rising from 7% of sales in 2012 to 14% in 2022 . Its popularity has soared, particularly in the large US market, owing to its appealing aesthetics, durability, and ease of maintenance in comparison to natural stone. This has positioned engineered stone as the most preferred countertop material in the US. The continued strong sales increases and increasing market share can be attributed to several factors:

• A growing variety of colours in line with current design trends sourced from both domestic and foreign

suppliers, offering consumers a wide range of options to suit their preferences.

• The increased availability of non-Breton equipment, mainly manufactured in China, which has allowed

producers to significantly enhance their production capacity.

• The abundance of low-cost quartz slabs from the Asia/Pacific region, Africa/Mideast region and other

locations has made engineered stone production more cost-effective, further driving its popularity.

• The establishment of broader distribution networks for engineered stone has made these countertops more

accessible and widely available, contributing to their growing demand.

Financial Result:-

Particulars Standalone (F.Y.)
2022-23 2022-21
Revenue from Operations and Other Income 19,048.01 28,626.52
Less: Operating Cost 17,028.99 25,556.74
Operating Profit/PBDIT 2019.02 3069.78
Less: Interest & Finance Charges 799.92 662.59
Less: Depreciation & Amortization Expenses 1134.66 1,088.32
Profit Before Tax and Exceptional Items 84.44 1318.86
Add: Exceptional items - -
Profit Before Tax 84.44 1318.86
Less: Provision for Tax (19.46) 374.34
Less: Prior Period Adjustment - -
Profit After Tax 103.90 944.50
Total Other Comprehensive income (20.44) 45.94
Total Comprehensive Income for the year 83.46 990.44


The Company has a sound internal control system, which ensures that (a) its financial reports are reliable, (b) its operations are effective and efficient, and (c) its activities comply with applicable laws and regulations. The internal control systems are further supplemented by internal audit carried out by an independent Chartered Accountant and periodical review by the Management. The Internal Audit process is designed to review the adequacy of internal control checks in the system and covers all the significant areas of the Companys operations.

The Audit Committee of the Board of Directors reviews the adequacy and effectiveness of the internal control systems and tracks the implementation of corrective actions. Significant audit observations and corrective actions taken by the Management are presented to the Audit Committee. To maintain its objectivity and independence, the Internal Audit reports are submitted to the Chairman of the Audit Committee. Audit Committee plays a key role in providing assurance to the Board of Directors.


Your Company believes that as a responsible corporate citizen, it must address the needs of underprivileged and committed to serving them. The Company is keen to fulfill its social responsibility by being actively involved in a variety of public services projects. We encourage collaboration with various NGOs to support in CSR activities at group level.


The Company believes in making the optimum utilization of all the available resources, to achieve this, human power is highly important and thus the Company time over has been taking newer and effective initiatives for improving the human resource strength and creating a conducive and healthy work atmosphere.

The Company consider its Human Resource as the most valuable resource which has to be nurtured well and equipped to meet the challenges posed by the dynamics of business developments. The Company continuously provide training to its employees both in-house as well as through reputed Institutes. The staffs are highly motivated due to good work culture, training, remuneration packages and the values, which the Company maintains. The Board of Directors would like to record their appreciation of the efficient and loyal service rendered by the Companys employees.


The Company achieved Revenues from Operations and Other Income (gross) of 19,048.01 Lakhs during the financial year ended 31st March, 2023,. The profit after tax 103.90 Lakhs during the year. The Management is confident of rebound in the economy and expect growth coming back in the ensuing years.


Statement in this Managements Discussion and Analysis detailing the Companys objectives, projections, estimates, estimates, expectations or predictions are -forward-looking statements- within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand-supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations.