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 |
+91-9892691696
