INDUSTRY STRUCTURE, DEVELOPMENTS AND ITS OUTLOOK
(A) RECYCLING MARKET:
(1) Global Recycling Market
(a) Trends in the Global Recycling Market
The global recycling market is set to grow rapidly due to improved technology, new regulations, and increased demand for recycled content. It was valued at USD 60.41 Billion by the end of 2022 and is projected to reach USD 88.01 Billion by 2030.
Global waste recycling services market size forecast to 2030 (in billion U.S. dollars)
(b) A Changing World and a Circular Economy
Urbanisation is a trend that is likely to continue, with two-thirds of the world population expected to reside in towns and cities by 2050. Living standards in cities tend to rise as people shift from rural to urban regions (at least in developing economies). This suggests that an increasing global population that is more urbanised leads to increased consumption. As a result, more waste would be produced, providing more opportunities to collect, process, and recycle this waste.
(c) World Markets
There are several factors that are making the global trading of recycled materials increasingly difficult like new Basel Convention standards for export of hazardous wastes to non-OECD nations with prior notification. Despite this fact, there are still a significant amount of materials being exported to manufacturing centres across the world with the help of recycling and trash trade organisations along with the Recycling Association, who are working hard to keep markets accessible.
(2) Indian Recycling Market
(a) India Recycling and Waste Management Market Analysis
The Indian waste management market size is estimated at USD 32.09 Billion in 2023, and is expected to reach USD 35.87 Billion by 2028, registering a CAGR of 2.25% during the forecast period (FY 2023-28). The Indian waste management market is witnessing a healthy growth rate, owing to the high population density and increased industrial activity, which is generating high amounts of wastes, both hazardous and non-hazardous.
(b) India Waste Management Market Trends
Landfill is one of the most popular methods of waste disposal in India, as more than 50% of the total solid waste generated is untreated and dumped into landfills, primarily due to inefficient waste management systems in
India. Private players are receiving huge impetus, especially in the municipal authorities of certain states in India, wherein waste management is not up to the mark, due to inadequate planning and lower spending than desired by the respective state governments.
(c) The Waste Management Startups/Initiatives
Swatch Bharat Initiative, the Indian governmentRs.s flagship programme to deal with waste collection and its effective management, is expected to provide immense growth opportunities to various upcoming startups that are focussing on providing innovative solutions. Electronic and biomedical wastes are the primary focus of these startups. They are focussing on finding creative scientific procedures to deal with the generated waste, while aiming for safer disposal. Each player has a unique style in terms of collection and treatment of waste. The Ministry of Environment, Forest and Climate Change, Government of India, published the Battery Waste Management Rules, 2022 on August 24, 2022, to ensure environmentally sound management of waste batteries. The said rules is based on Rs.Polluter Pays PrincipleRs. were the responsibility vests with Extended Producer Responsibility (EPR) who are the producers (including importers) of batteries and further they are responsible for collection and recycling/refurbishment of waste batteries and use of recovered materials from wastes into new batteries.
(B) LEAD MARKET
(1) Global Lead Market
(a) The lead market is projected to register a CAGR around 7% during the forecast period. The following graph shows the global lead acid battery market from the year 2022 till 2032 (value in USD Billion). Further based on the market demand it is forecasted in the year 2032 to reach size around USD 60 Billion.
(b) The Adoption Scenario of Lead Market
High public awareness of the benefits of employing lead batteries in sophisticated cars, such as stop-start and hybrid vehicles, as well as renewable energy generation, is expected to boost demand for lead in the future years. According to Government sources of various developed and developing economies, their nationwide demand for energy is expected to be doubled within the next decade. Owing to this, various countries, such as China and India have started making huge investments in smart grid technology in order to meet the huge demand for power.
(c) Utilisation of Lead MarketRs.s Growth Opportunities by Different Countries
The market is predicted to increase steadily due to rising demand for lead-acid batteries for automotive applications as the vehicle industry grows. North America was the largest consumer of lead owing to its vast construction and automobile industry. The demand in Europe is expected to rise moderately on account of declining automobile sales. However, future market growth is expected to be from the Asia-Pacific region on account of the rising demand for energy in smart grid technology, which includes electric vehicles operated on lead batteries.
(d) Lead Market Dynamics and Future Analytics
The developed, derived, intermediaries, raw material, and substitute market are all evaluated to better prospect the lead market outlook. Geopolitical analysis, demographic analysis, and portersRs. five forces analysis are prudently assessed to estimate the best lead market projections. Other metrics analysed include the threat of new entrants, threat of new substitutes, product differentiation, degree of competition, number of suppliers, distribution channel, capital needed, entry barriers, govt. regulations, beneficial alternative, and cost of substitute in lead market.
(2) Indian Lead Market
(a) Outlook on Indian Lead Market
Starting, lighting and ignition (SLI) type of lead acid batteries account for the largest market share in India, as these batteries are extensively used in passenger cars and two-wheeler vehicles. A large demand for lead acid battery emanates from North India, which can be attributed to increasing sales of automobiles, rise in power backup solutions, and growing telecommunication and solar infrastructure in the region. The following data explains IndiaRs.s lead acid battery market size region-wise from the year 2022 till 2028 (forecasted).
(b) SWOT Analysis
Strengths
- Established technology with a long history of use
- Reliability and robustness of lead-acid batteries
- Cost-effectiveness compared to alternative battery technologies
Weaknesses
- Limited energy density compared to lithium-ion batteries
- Environmental concerns related to lead content and recycling
- Relatively shorter lifespan compared to some alternative battery technologies
Opportunities
- Growing demand for energy storage solutions
- Increasing adoption of electric vehicles and renewable energy sources
- Government initiatives and policies promoting sustainable energy
Threats
- Competition from alternative battery technologies such as lithium-ion batteries
- Strict environmental regulations and disposal requirements
- Volatility in raw material prices
(c) Key Indian Lead Market Insights
The India lead-acid battery market is expected to witness a CAGR of 9% during the forecast period (FY 2022-32)
The automotive sector is the largest consumer of lead-acid batteries in India, accounting for a significant market share
The market is driven by the increasing demand for uninterrupted power supply and energy storage solutions
Key players in the market are focussing on product innovation, research and development and strategic partnerships to gain a competitive edge
(d) Recent Trends in Lead Market
Shift towards advanced lead-acid batteries
Increased focus on battery recycling
Integration of IoT and battery management systems
Growing demand for lithium-ion alternatives
(C) ALUMINUM MARKET
(1) Global Aluminum Market
(a) Aluminum Market Size, Growth Report, Trends
The global aluminum market size was estimated around USD 179 Billion at end of the year 2022 and is expected to hit around USD 278 Billion by 2030, growing at a compound annual growth rate (CAGR) of 5.61% from 2022 to 2030. The following graph shows the global aluminum market size from the year 2022 till 2023 (value in USD Billion)
(b) Growth Factors
Because of its harmless nature, it is widely employed in the food and packaging industries as well as the pharmaceutical industry. Aluminum is widely used in construction, transportation, packaging, and electrical sectors, to name a few. These four businesses collectively use the majority of the aluminum that the industry uses annually. Government officials are working very hard to improve industrialistsRs. accessibility to aluminum. Its outcomes are anticipated to have a substantial impact on the growth of the global aluminum industry.
(c) Region-Wise Usage of Aluminum
The following pie-chart (based on the statistics of the year 2023) represents the global usage of aluminum:
(2) Indian Aluminum Market
(a) Aluminum Market Size
The following data explains in the IndiaRs.s Aluminum Market size region-wise from the year 2022 till 2030 (forecasted):
(b) Key End-User Segments for Usage of Aluminum (Primary and Secondary Aluminum) at the End of Fiscal Year 2022
(c) Key Risk Factors
Heavy dependence on imports
High material cost
Lack of automation
Fragmented nature of the industry
Risk of impurities
(D) COPPER MARKET
(1) Global Copper Market
(a) Overview
The global market for copper estimated at USD170.9 Billion in the year 2022, is projected to reach a revised size of USD 242.8 Billion by 2027, registering a CAGR of 6.2% over the analysis period FY 2022-27. The growth of the copper market in various regions across the globe has been supported by an increase in end-user sectors such as automotive and electronics, as well as increasing per capita income. According to the International Energy Agency (IEA), after a decade of tremendous growth, there were 10 Million electric cars on the road around the world by the end of 2022.
(b) Market Drivers
Global recycle copper market growth is driven by an increasing emphasis on secondary metal production due to environmental concerns such as energy consumption and waste disposal. Demand for copper in energy transition applications is expected to climb about 8.2% over the next decade, outstripping a projected 2.9% increase in copper demand in that period for traditional uses such as construction, infrastructure, machinery, and transportation.
(c) Key Copper Market Challenge
Since copper is the worldRs.s third-largest consumed metal after iron and aluminum, its fluctuation in prices is affecting the global market demand. Some other factors that are affecting global prices are changing rate of the US dollar, volatility in oil prices, and collateral demand for copper in China. The increasing cost of copper has resulted in fluctuation in the demand-supply gap, negatively impacting the end-user industries. In addition, ineffective pricing strategies impact the sales volume and revenue of the global copper market. Also, the impact of fluctuating costs of copper is high on the manufacturers of copper derivatives such as wire rods, pipes and tubes, and other copper products.
(2) Indian Copper Market
(a) Overview and Synopsis
IndiaRs.s copper imports, are anticipated to grow 3.4% yearly to reach USD 6.9 Billion by 2026. In India, copper is an essential metal that has been widely used in various industries for centuries due its superior properties such as electrical conductivity, thermal conductivity, ductility, malleability, corrosion resistance and toughness among others. The utilisation of copper has increased significantly over the past few decades driven by advancements in manufacturing technology and increased industrialisation across many emerging economies including India, which are further expected to fuel industry demand going forward. According to a study commissioned by the (International Copper) Association, copper usage in India is likely to witness a substantial jump in till 2030 led by growth in building and construction, the manufacturing industry, transport, consumer durables and diversified sectors.
(b) Demand Prospects of Copper
Beyond medium term by when the low base effect on current demand has worn thin, the use of copper in India is to see an annual growth rate of 8% or more enabled by rising demand from traditional sectors such electrical applications, building and construction and white goods such as air-conditioners, refrigerators and washing official machines and also from growing focus on decarbonising the economy.
Further, as the country progressively steps up production of electrical vehicles (EVs), a major copper use area will open up. EVs will require five times more copper than vehicles made with internal combustion engine (ICE). A good amount of red metal will be used in making batteries for EVs, cables and charging stations.
(c) Usage of Copper for Sustainable Development
As India pursues the target of achieving non-fossil fuel-based energy resources constituting around 40% of cumulative electric power installed capacity, a major demand avenue for copper will open up. In the Indian basket of sustainable clean energy, solar power will have pride of place since this tropical country has the potential to draw a vast amount of electricity from the blazing sun. The National Institute of Solar Energy estimates IndiaRs.s solar power potential at 748 gw. But the immediate target of HonRs.ble Prime Minister solar mission is to achieve a solar capacity of 100 gigawatt.
The country seen as the fourth most attractive renewable energy market in the world is placed fifth in global solar power pecking order. Growing demand of copper will also be seen say for a creation of 1 mw of solar cell capacity, there will be requirement of 6 tonnes of copper. Similarly, in renewable wind energy, considerable amount of copper is used in the generator, cabling and transformer of a turbine.
RISKS, OPPORTUNITIES AND THREATS
The metal industry has been on an uptick, underpinned by supply-demand deficit, backed by bullish global growth indicators and supply related reforms. The long-term trends in the industry, the demand for the metals and our strong balance sheet provides us many opportunities to create value for stakeholders. POCLRs.s success as an organisation depends on our ability to identify opportunities and leverage them, while mitigating the risks that arise while conducting our business. Pricing, growing demand and ongoing market volatility are the major challenges faced by the Company. POCL seeks to maintain balance sheet liquidity and implement plans to boost operational cash flow for long-term profitability. Cash generation and preservation remain a key focus.
The Company is subject to the risk that changes in foreign currency values impact the CompanyRs.s export revenues and import of raw materials. The Company is exposed to foreign exchange risk arising from currency exposures, primarily with respect to US
Dollars. POCL has in place a robust risk management framework for identification and monitoring and mitigation of commodity price and foreign exchange risks. The risks are tracked and monitored on a regular basis and mitigation strategies are adopted in line with the risk management framework. POCL primarily use forward exchange contracts to hedge the effects of movement in exchange rates.
SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
Lead & Lead Alloys
During the year 2022-23, your Company had achieved the good capacity utilisation and the CompanyRs.s annual production of lead metal and alloys was 69,914 MT against 69,158 MT for the previous year showing marginal increase in the production despite certain macro-economic and geopolitical issues. The overall lead manufacturing capacity of all units together is at 1,32,000 MT per annum.
Aluminum & Aluminum Alloys
During the year 2022-23, the Company had obtained consent for operations from Tamil Nadu Pollution Control Board (TNPCB) for the total capacity at 14,750 MT for manufacture of Rs.aluminum and aluminum alloysRs.. The Company is in the initial stages of production of aluminum & aluminum alloys and during the previous year there was production of 284 MT and the Company is looking for viable opportunities for increase in its capacity going forward.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Board has devised systems, policies and procedures/frameworks, which are currently operational within your Company for ensuring the orderly and efficient conduct of its business, which includes adherence to policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. In line with best practices, the Audit Committee and the Board reviews these internal control systems to ensure they remain effective and are achieving their intended purpose. Where weaknesses, identified any, are as a result of the reviews, new procedures are put in place to strengthen controls. These controls are in turn reviewed at regular intervals.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
Performance Metrics | FY 2022-23 | FY 2021-22 | Change % |
Revenue from Operations | 1,471.67 | 1,454.80 | 1.16 |
Earnings Before Interest, Tax, Depreciation & Amortisation (EBITDA) | 82.66 | 81.79 | 1.06 |
Depreciation and Amortisation Expense | 10.06 | 8.99 | 11.90 |
Earnings Before Interest and Tax (EBIT) | 72.59 | 72.79 | (0.27) |
Finance Costs (Interest) | 6.84 | 8.44 | (18.96) |
Earnings After Tax (EAT) | 49.20 | 48.25 | 1.97 |
Shareholders Fund | 254.15 | 208.15 | 22.09 |
Earnings Per Share (EPS) | 42.32 | 41.50 | 1.98 |
Dividend * (Previous and Current Year – 50%) | 5.81 | 2.91 | 100.00 |
Net Fixed Assets | 85.60 | 50.09 | 70.89 |
Capital Work in Progress | 7.03 | 3.47 | 102.59 |
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED
The employees of the Company are our best assets and their commitment towards work is directly proportional to our inherent strength. At POCL, we encourage our people to discover and realise their valuable potential. Having varied experiences and exposures, implementing challenging tasks along with continuous learning enables the employees of POCL deliver optimum results. Acculturing new employees through physical interactions with senior colleagues and leaders, by observing and following their behaviours and ways of thinking have been crucial keeping the employees in momentum. POCL being an equal opportunity employer and has a well-defined and progressive diversity, equity and inclusion approach embracing all diversity parameters which includes gender, marital status, religion, race/caste, colour, age, ancestry, nationality, language, ethnic origin, socio-economic status, physical appearance, disability, gender identity and/or expression and any other category protected by applicable law.
DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG-WITH DETAILED EXPLANATION INCLUDING
Key Financial Ratios | FY 2022-23 | FY 2021-22 | Change % | Remarks |
DebtorsRs. Turnover (in times) | 15.78 | 14.83 | 6.41 | Marginal increase in sales and decrease in trade receivables |
Inventory Turnover (in times) | 9.80 | 10.61 | (7.63) | Due to marginal increase in inventory |
Interest Coverage Ratio (in times) | 10.61 | 8.62 | 23.09 | Due to effective financial management |
Current Ratio (in times) | 1.64 | 2.34 | (29.91) | Due to utilisation of funds |
Debt Equity Ratio (in times) | 0.02 | 0.04 | (50.00) | Due to repayment of debt |
Operating Profit Margin (%) | 5.62 | 5.62 | No change | |
Net Profit Margin (%) | 3.34 | 3.32 | 0.60 | Marginal increase in profit |
Return on Networth (%) | 21.29 | 26.12 | (18.49) | Due to decrease in profit |
CAUTIONARY STATEMENT
Statements in this Annual Report on describing our objective, projections, estimates and expectations may be Rs.forward-looking statementsRs. within the meaning of applicable laws, rules, regulations, etc. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets, in which we operate, in addition to changes in government regulations, tax laws and other statutes and incidental factors.
For and on behalf of the Board of Directors | ||
Pondy Oxides and Chemicals Limited | ||
Anil Kumar Bansal | Ashish Bansal | |
Date: August 11, 2023 | Chairman & Whole-Time Director | Managing Director |
Place: Chennai | DIN: 00232223 | DIN: 01543967 |
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www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.