Prevest Denpro Ltd Management Discussions

616
(-0.48%)
Jul 23, 2024|03:40:00 PM

Prevest Denpro Ltd Share Price Management Discussions

In 2022-23, the global economy experienced a mixed environment. Initially, there were signs of recovery from the COVID-19 pandemic, resulting in increased demand across various sectors. However, challenges emerged later with rising inflation, supply chain disruptions, and geopolitical tensions affecting economic growth.

During the fiscal year 2022-23, Prevest Denpro Limited achieved robust revenue growth. Our total revenue increased by 30.58% compared to the previous fiscal year, reaching 51.89 crore. This growth was primarily driven by strong performance in both domestic and international markets.

Our profitability also showed significant improvement during the year. The companys operating profit margin expanded due to efficient cost management and increased sales volume. As a result, the net profit witnessed a healthy growth of 35.80% compared to the previous year.

Prevest Denpro Limited successfully launched several new products during the year, strengthening our market position and catering to evolving customer demands. The introduction of these innovative products was well received by customers, contributing positively to our revenue growth.

We strategically expanded our market presence to new geographies, capitalizing on emerging opportunities. This expansion not only helped diversify our revenue streams but also mitigated risks associated with dependence on any single market.

Additionally, we continued to invest in Research and Development (R&D) activities, aiming to enhance product quality and develop cutting-edge solutions. These efforts not only strengthened our existing product portfolio but also positioned the company for future growth in specialized segments.

Challenges:

Amidst our achievements, we faced some challenges during the financial year. Supply chain disruptions posed significant obstacles, impacting the timely procurement of raw materials and components. Nevertheless, we adopted proactive measures to manage these disruptions and ensure continuity of operations.

Foreign exchange rate fluctuations also affected our business during the year, impacting import costs and export revenues. While we implemented hedging strategies to mitigate exchange rate risks, some impact on our bottom line was unavoidable.

Corporate Social Responsibility (CSR):

Throughout the financial year, Prevest Denpro Limited remained committed to its CSR initiatives. We continued to support various social and environmental causes, aligning our efforts with our responsibility towards society and the environment.

Future Outlook:

Looking ahead, the outlook for Prevest Denpro Limited appears promising. The company is well-positioned to leverage its strong brand reputation, diversified product portfolio, and expanding market presence. Management remains focused on sustaining revenue growth, enhancing profitability, and exploring new avenues for innovation and expansion.

As with any business, Prevest Denpro Limited faces certain risks that could impact its performance in the future. These risks include economic uncertainties, changes in the regulatory environment, intense competition, and potential technology disruptions. However, we have comprehensive risk management policies in place to address these challenges effectively.

In conclusion, Prevest Denpro Limited had a successful financial year 2022-23, achieving impressive revenue growth and profitability despite a dynamic economic landscape. Our strategic initiatives and commitment to innovation and quality have reinforced our market position. As we move forward, the management remains dedicated to delivering sustainable growth and creating long-term value for all stakeholders.

Financial Ratios

A. Current Ratio
Current Assets 5,432 5,270
Current Liabilities 540 540
Current ratio 1006% 976%
Increase / (Decrease) in ratio 3%
B. Debt Equity Ratio
Long term borrowings - 136.67
Short term borrowings - -
Total Debt - 136.67
Share Capital 1,200.30 1,200.30
Reserves & Surplus 6,079.45 4,508.44
Money received against Share Warrants - -
Shareholders Equity 7,279.75 5,708.74
Debt Equity Ratio 0.00% 2.39%
Increase / (Decrease) in ratio (100.00)
Reason for Increase / (Decrease) Company has Repaid Loans during the year.
C. Debt Service Coverage Ratio
Profit after taxes 1,571.01 1,156.88
Add: Interest - 10.42
Depreciation & Amortization 67.51 52.40
Earnings available for debt service 1,638.52 1,219.71
Interest

-

10.42
Short term borrowings - -
Debt Service - 10.42
Debt Service Coverage Ratio 0% 11704%
Increase / (Decrease) in ratio -100%
Reason for Increase / (Decrease) Interst has been Decrease to Zero Due to which Ratio Decrese By 100%
D. Return on equity
Net profit after taxes 1,571.01 1,156.88
Equity (As defined in Debt Equity Ratio) 7,279.75 5,708.74
Return on equity ratio 21.58% 20.27%
Increase / (Decrease) in ratio 6.49
Reason for Increase / (Decrease) Profit of the company has increase due to higher revenue, hence imporovment in the ratio.
E. Inventory Turnover Ratio
Cost of Goods Sold 1,260.79 977.91
Opening stock 326.00 127.00
Closing stock 478.89 326.00
Average Inventory 402.45 226.50
Inventory Turnover Ratio 313% 432%
Increase / (Decrease) in ratio (27.44)
Reason for Increase / (Decrease) Increase in Inventory resulted into lower inventory turnover ratio
F. Trade Receivables turnover Ratio
Revenue from Operations 4,985.41 3,811.13
Average Trade Receivables 331.28 303.00
Trade Receivable Turnover ratio (in days) 1504.90% 1257.80%
Increase / (Decrease) in ratio 19.65%
G. Trade Payables Turnover Ratio
Total Purchase 1,401.75 1,166.00
Average Trade Payables 151.76 277.00
Trade Payables Turnover Ratio (in days) 923.67% 420.94%
Increase / (Decrease) in ratio 119.43%
Reason for Increase / (Decrease) The purchase has been increased drastically hence change in the ratio.
H. Net Capital turnover ratio
Revenue from Operations 4,985.41 3,811.13
Current assets - Current Liabilities 4,891.66 4,730.25
Net Capital turnover ratio 101.92% 80.57%
Increase / (Decrease) in ratio 26.50
Reason for Increase / (Decrease) The revenue of the company has increased drastically hence change in the ratio.
I. Net Profit Ratio
Net Profit 1,571 1,157
Revenue from Operations 4,985 3,811
Net Profit Ratio 31.51% 30.36%
Increase / (Decrease) in ratio 3.81%
J. Return on capital employed
Profit before taxes 2,095.68 1,605.17
Add: Interest - 10.42
Profit before interest and taxes 2,095.68 1,615.59
Share Holders Funds 7,279.75 5,845.41
Add: Borrowings -
Total Capital Employed 7,279.75 5,845.41
Return on capital employed 28.79% 27.64%
Increase / (Decrease) in ratio 4.16%
Reason for Increase / (Decrease) Profit of the company is Increase as compared to last year hence change in the ratio.

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