Plaza Wires Ltd Management Discussions

PRIMARY BUSINESS OF OUR COMPANY

We are an ISO 9001:2015 and 14001:2015 certified company engaged in the business of manufacturing and selling of wires, and selling and marketing of LT aluminium cables and fast moving electrical goods under our flagship brand "PLAZA CABLES" and home brands such as "Action Wires" and "PCG". In 2021, we launched a line of house wire under the brand "Action Wires" for product at economical price range. Our product mix comprises different type of wires and cables, and fast moving electrical goods such as electric fans, water heaters, switches and switchgears, Poly Vinyl Chloride insulated electrical tape and Poly Vinyl Chloride conduit pipe & accessories. we are one of the growing manufacturers in the wires and cables industry in northern region in India, and provide extensive range of wires and cables.

GLOBAL MARKET OVERVIEW

The Global Wire & Cable Compounds market was valued at USD 12.5 Billion in 2021 and is projected to reach USD 19.2 Billion by 2026, growing at 9 % CAGR from 2021 To 2026. The market is growing due to rise in demand from construction, power, communication and automotive industries. However, owing to COVID -19, the sales of various industries has declined resulting in reduced demand for wire & cable compounds.

INDIA OUTLOOK

The Indian wires and cables market size reached a value of nearly INR 1083.71 Billion in 2023. The market is projected to grow at a CAGR of 14.5% between 2024 and 2032 to reach around INR 3655.81 Billion by 2032.The demand for wires and cables in India is expected to ramp up with the expansion of renewable power generation, the upgrading of transmission and distribution infrastructure, rising investments in metro railways and smart grid initiatives, and the growing data center sector. Demand for building wires and power cables would be spurred by government schemes such as Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya scheme) and Power for All, focusing on electrificaron of rural households and T&D efficiencies, as well as an increase in cabling demand from commercial establishments and public utilities. Growth in Renewable energy capacities will drive demand 116 for solar cables and elastomeric cables used in windmill applications. In Tier I cities, increase in demand and the lack of open spaces to setup towers, coupled with rising demand from infra projects like metro has swelled the demand for Extra High Voltage (EHV) underground cables

The market is expected to be driven by factors such as the growth in renewable power generation in India, the expansion and revamping of Transmission & Distribution infrastructure in India, and increasing investments in metro railways. Increased investments in smart grid projects and up-gradation of power transmission and distribution systems are also estimated to propel the demand for wires & cables globally. Significant investments in smart grid technology have resulted in an increasing need for grid interconnections. Additionally, rising investments in underground cables and the growth of renewable energy are set to escalate the adoption of wires and cables.

Wire and cables demand is directly dependent on the growth of the manufacturing industry and infrastructure in the power, telecommunications, residential and commercial sectors. Thus, the governments initiatives on various fronts like - power, housing, infrastructure and digitization are sure to generate a lot of business for the wire and cable industry in the foreseeable future.

Likewise, with the governments emphasis on pushing renewable energy to the forefront, the industry is now looking forward to supplying cables for solar and wind power applications in addition to oil and gas, railways and other specialized segments. Wires and cables are deployed across an extensive range of applications which include consumer electronics, Utilities, material handling, automotive, and entertainment/leisure amongst others. Growing inclination toward the expansion of prevailing grid networks coupled with lack of efficient electric infrastructure will propel the industry outlook over the forecast timeline.

The manufacturing industry too is experiencing robust growth due to growing capacity utilization, the PLI scheme, and the ‘Make in India initiative, generating more business opportunities for Wire & Cable players.

A Brand PLAZA CABLE is a familiar name in the industry and owing to our past legacy and we plan to gain energy from the same. We are not only focussing on current operations and developments but also looking to future for expanding our business and operations. The PLAZA CABLE has been fortunate to have strong connection with major industrial players because of qualitative products matching with the requirements. The factory being located in the state of Baddi, Himachal Pradesh which is largest industrial growing state and has immense opportunities in wires and cables industry.

Over our operating history of more than a decade, our supply chain model predominantly comprises of our network of authorized dealers, distributors, retailers and C & F agent who in turn supply our products to retail outlets in India. We have a wild network of authorized dealers and distributors pan India and C & F agent in 1 state, viz. Punjab for the period ended on March 31, 2024. We supply our products across various states, mainly in states of Delhi, Uttar Pradesh, Haryana, Kerala, Rajasthan and Punjab. For the Fiscal 2024, 2023 and 2022, the aggregate revenue from operations (including trade discounts to dealers and distributors) from these states were ^ 1402.18 million, ^ 1,382.27 million and ^ 1,388.28 million, respectively. The percentage of the aggregate value to our revenue from operations for Fiscal 2024, 2023, and 2022 were 70.53%, 75.74%, and 78.53%, respectively. We manage our sales and marketing activities through our registered office in Delhi, and branch offices and C & F agent at various locations. We had customers expanded to 31 states and states/union territories based on March 31, 2024.

We sell our products through a variety of distribution channels depending on the geography and industry norms and trends. We select our dealers & distributors based on their sales network, market reputation and financial strength including sales and 2) Securing government tenders for supply to government projects and 3) Direct sales to infrastructure projects.

OPPORTUNITIES AND THREATS

The management of the company is well equipped with the vision to take company towards high growth with optimum utilization of resources of the company in proper manner. The management is taking diligent efforts to boost the capacity utilization of the company. The company has hired qualified professionals to stimulate the vision and motive of company.

STRENGTH

Cables are the backbone of the Communication, Power and Real est?te Sector. Favourable demographics and increased discretionary spending drive the growth of this sector. India is the fastest growing telecom market in the world adding huge subscribers base every month. In addition, the telecom companies are aggressively making inroads into rural markets. In addition, with the government initiatives is likely to keep the demand for telecom inf rastructure, including cables to remain strong. The Indian cable industry is having strong clearly there is great potential for further expansion in India. The residential sector is expected to grow significantly, with the central government aiming to build more than 20 million affordable houses in urban areas across the country under the ambitious Pradhan Mantri Awas Yojana (PMAY) scheme of the Union Ministry of Housing and Urban Affairs. Expected growth in the number of housing units in urban areas will increase the demand for commercial and retail office space.

WEAKNESS

Weakness The raw material prices viz; the copper and Aluminium remains volatile and the industry is fully dependent on them. The Russia-Ukraine crisis is expected to affect the copper supply side more than the demand side. Aluminium prices have remained at elevated levels in recent weeks on supply concerns after European primary aluminum smelters were forced to cut their output due to energy crisis. All this will have impact on the margins of the manufacturer.

OPPORTUNITIES

The Indian government initiative of launching projects such as 100 smart cities and ‘Housing for All and are also expected to immensely drive the residential construction market in the country and major focus on infrastructural sector will lead to huge opportunity for the cable and wire market growth.

THREATS

Prices of many key raw materials used in cable-making rose sharply, becoming much more volatile, with substantial fluctuations in market prices on a short timescale. Since, then the volatility has continued and prices have now risen again. The price of copper in particular is now a major talking point in the cable industry.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, the Company achieved Revenue from operations of 1988.05 Million as compared to 1824.92 Million in the previous financial year. Further, the Company has earned profit after tax and exceptional items of 36.77 Millions in the current financial year as against profit of 72.97 Millions in the previous financial year.

KEY STANDALONE FINANCIAL RATIOS

PARTICULARS	FY 2023-24	FY 2022-23	EXPLANATION FOR CHANGE IN THE RATIO BY MORE THAN 25% AS COMPARED TO THE PREVIOUS YEAR
Trade Receivable Turnover Ratio	3.55	3.78	-
Inventory Turnover Ratio	4.86	4.58	-
Current Ratio	2.94	1.66	Change in mainly due to increase in current assets on account temporary IPO Fund park in working capital.
Debt Equity Ratio	0.35	0.75	Change due to increase in equity on account of IPO during Current Year.
Net Profit Ratio	2%	4%	On account of Lower profit in current year as compared to previous year
Return on Capital Employed	6%	16%	Change due to increase in equity and lower profit during the current year as compared to previous year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Human capital is the most essential part of the Company. The Company keeps promoting a collaborative work environment where all the employees feel safe and a part of the Company. The Human Resources policies of the Company are aimed at attracting, nurturing and retaining talent in a constantly evolving business environment while ensuring trust, transparency and teamwork amongst its employees.

The Company recognizes the importance of human resources in realising its growth ambitions and believes in nurturing talent within the organization to take up leadership positions. During the year Company continued to maintain healthy and cordial relationship with its employees.

EXPORTS

Plaza Wires Limited export business has expanded its business operations by introducing their products internationally. The entrance has been initiated through Bhutan, neighbouring county of India. In the Financial Year 2023-24, the company has made in export of Wires & Cables and earned 3.65 Millions revenue. Further, the company is focussing to cater international market covering major countries in the next upcomg financial years.

RISKS AND CONCERNS

The wire and cable industry has vast potential in growth in coming years but it has some challen- ges also, the increasing price rise and competition from Chinese imports. The wire and cable industry is experiencing volatility in raw material prices, as the price of copper continues to increase, profit margins are squeezed and they become uncompetitive in the international market. Country is experiencing an all-time high price of fuel its direct impact on domestic transportaron, in result wire and cable transportation has increased. Also, a large section of the industry is still unorganized; there is a lack of quality product offerings from these players due to non- compliance with the product guidelines. Slowdown in the Indian economy due to global developments could adversely impact growth in the short-term envisage a risk Management is yet to set up exercises to be carried out to identify and evaluate, manage and monitor various risk.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a well-framed internal control system commensurate with the size and nature of its business. These internal Controls ensure safeguarding of assets from unauthorised use or disposition, proper recording and reporting of all transactions and compliance with applicable regulatory requirements. The internal control systems are reviewed and modified continually to keep up with the changes in business environment and statutory requirements. The framework is monitored by the internal audit team of the Company. The Audit Committee of the Board is periodically apprised of the internal audit findings. The Audit Committee reviews the efficacy and effectiveness of the internal control system, takes corrective actions and suggests measures for strengthening it. The Company has a robust Management Information which forms an integral part of the control mechanism.

DISCLOSURE OF ACCOUNTING TREATMENT

The Company prepared its Financial Statements to comply with the Accounting Standards specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time. These Financial Statements includes Balance Sheet as at 31st March 2024, the Statement of Profit and Loss including Other Comprehensive Income, Cash Flow Statement and Statement of changes in equity for the financial year ended on 31st March, 2024, and a summary of significant accounting policies and other explanatory information (together hereinafter referred to as "Financial Statements").

CAUTIONARY STATEMENT

Statements in this report describing the Companys objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations that involve risks and uncertainties. Such statements represent the intention of the Management and the efforts being put into place by them to achieve certain goals. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances. Therefore, the investors are requested to make their own independent assessments and judgments by considering all relevant factors before making any investment decision.

	For and on behalf of Plaza Wires Limited
	SANJAY GUPTA
Date: 13th August, 2024	Chairman and Managing Director
Place: Delhi	DIN:00202273