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Prithvi Exchange (India) Ltd Management Discussions

25.75
(51.47%)
Jan 29, 2015|12:00:00 AM

Prithvi Exchange (India) Ltd Share Price Management Discussions

MARKET SCENARIO

Indias Hospitality sector is showing fast recovery post the Covid 19 Pandemic that crippled it. There has been unprecedented Zeal through 2022 to make up for the lost travel opportunities during the pandemic lockdowns. The improving dynamics of Players has resulted in supply additions that were deferred due to Covid-19, gathering momentum during fiscals 2022 and 2023

The Tourism and hospitality sectors are a significant source of foreign exchange and crucial for socioeconomic growth. According to the statistics of India Brand Equity Foundations (IBEF), the tourism Industry and hospitality industry in India is growing on robust demand, and the travel market is projected to reach US $ 125 billion by FY 27 form as estimated US $75 billion in FY 20. The influx of International tourists to India is projected to reach 30.05 million by 2028. FDI inflows in the tourism sector is projected to contribute US $56 billion forex to GDP and generate 140 million jobs.

According to the Bureau of immigration (BOI) report, the numbers have risen after the pandemic. Around 7.5 lakh Indians went abroad for higher education in 2022, a drastic increase from 4.5 lakhs in 2017 and 2.6 lakhs in 2020. India surpassed China in terms of the most international students in the US in 2022.

INDIAN HOSPITALITY AND TOURISM INDUSTRY

FY 2022-23 continued to be a year of strong recovery in the Indian travel and tourism industry. Restrictions on flights were relaxed in most countries into and from India. Travel restrictions, documentation and certifications were also progressively relaxed for travel within India. Consequently, demand for accommodation grew significantly, mainly arising from domestic leisure travel, weddings, social events, conferences and resumption of business travel within the country. Foreign tourist arrivals were 6.19 million for the calendar year 2022 in comparison with 1.52 million in 2021.

This constituted 57% of 2019 foreign tourist arrivals at 10.93 million (Government of India, Ministry of Tourism Annual Report - 2022-23

Outlook

The outlook for the Indian hospitality industry during 2023 remains positive. As the International tourism provides an excellent outlet for relaxation and motivates the travellers for exploration of new areas, visiting religious places, traveling for pleasure, attending and participating in sports events, professional and business visits. We also witness people traveling more in numbers for enhancing prestige and status. Hence the future of International Tourism is quite bright.

After international travel, Indians spent most on maintenance of close relatives, followed by gifts, investment in equity and overseas education.

Outward Remittances - LRS: Snapshot of the Indian money changing industry.

Item 2022 - 2023 2021 - 2022
1.outward Remitances Under The LRS 27140.65 19610.77
1.1. Deposit 1011.07 830.05
1.2 Purchase Of Immovable Property 188.73 112.90
1.3 Investment In Equity / Dept 1256.15 746.57
1.4. Gift 3005.27 2336.29
1.5 Donations 12.78 16.55
1.6 Travel 13662.15 6909.04
1.7 Maintenance Of Dos Relatives 4174.06 3302.37
1.8 Medical Treatment 55.74 37.79
1.9 Studies Abroad 3427.81 5165.33
1.10 Others 346.89 153.88

Indians took out $ 27.14 billion (around Rs 2.24 lakh crore) during the year ended March 2023 under the Liberalised Remittances Scheme of the Reserve bank of India, a rise of 38.39 per cent when compared to $ 19.61 billion in the previous year ended March 2022. The outflow works out to just 4.54 per cent of Indias forex reserves of $ 600 billion.

Indians spent around $ 13.66 billion (over Rs 1.13 lakh crore) on overseas travel in the current financial year, a 98 per cent jump from the same period of last year, the latest data from the RBI showed. The total amount spent on travel outside India was $ 6.90 billion under the LRS In the same period of FY2022. The amount spent on foreign travels during the first 10 months of fiscal 2022-23 almost doubled when compared to the same period of previous fiscal as flights resumed and travel restrictions were eased by countries in the wake of subsiding Covid pandemic.

The data showed that travel constitutes around 50 per cent of the total outward remittances allowed under the LRS for resident individuals in FY2023. During 2021-22, the share of travel was 35 per cent of the overall international spending by Indians. The overseas education segment had a contradicting year with 3.42 bn$ against 5.16 bn$ in FY 2021-22.

Overseas education:

More than 1.3 million Indian students went abroad for studies in 2022, as per Ministry of External Affairs data. This was the highest ever! A study by revealed the number of students planning to go overseas in 2023 is likely to be more than 1.5 million. The increasing desire to study overseas is credited to the pent-up demand from the pandemics two-year duration. This has got further pronounced because of growing aspiration and affordability among the middle-class students from Tier II and Tier III cities.

The top countries for Indian students are US, Canada, UK, Australia and Western European countries like Germany, France and Netherlands. While the maximum number of students continue pursuing post-graduate degrees and diplomas, the number of Indian students pursuing under-graduate degrees is rapidly growing as well. According to a Report, most international students in the US, Canada and Western Europe (about 75%) apply for undergraduate and graduate programmes, and more than half choose to enrol in engineering, maths, computer science, or business and management courses.

India is second to China when it comes to students pursuing international courses. Apart from exciting research opportunities, most countries provide a stay back option on visas to foreign students for job search. The major draw is exposure to multiculturalism, among other factors listed below:

• Attractive salary packages (44%)

•High quality of education (33%)

• Pursue niche courses (17%)

• Gain international exposure (6%)

Which Indian states send most students abroad?

•Andhra Pradesh (12%) •Gujarat (8%)
•Punjab (12%) •Tamil Nadu (7%)
•Maharashtra (11%) •Karnataka (5%)

Which Indian states send most students abroad?

As you can see from the data above, most students from Andhra Pradesh, Punjab, and Maharashtra migrate abroad, which are among the richest Indian states with presumably high awareness of the benefits of foreign education.

In 2022, about 750 thousand students from India emigrated to study abroad. The number of students emigrating from India was the highest that year. Australia, Canada, and the United States of America were the countries with the highest numbers of Indian students during the measured time period.

United Arab emirates 1,64,000
Canada 1,83,300
USA 4,65,000
Australia 1,00,009
Saudi Arabia 65,000
United Kingdom 55,465

Opportunities:

Presently in India roughly 33 active non-bank AD cat IIs share the market with presence across the countrys length and breadth. Our peers cover the areas from Jammu until Kanyakumari and from the remote part of the west starting in Gujarat until the end of the rising sun. With a favourable market and positive sentiment, your company will explore the best possible way to grow its business activities. Airport counters, sea ports and border check points pose a profitable business module which is being explored with the best man power available and various other opportunities owing to market consolidation is being considered. Further, on the technology driven business module with advent of RBI norms allowing Vkyc and online Form A2 submission system will work favorably on the AD II side thereby improving the compliance mechanism and ease of doing business. Moreover, we are planning to accelerate our growth via inorganic methods and organic methods like branch expansions in Punjab, Kerala, West Bengal, Vizag, Vijaywada, Indore etc., plans are also under pipeline to explore international presence in Canada & Singapore.

RISK MANAGEMENT FRAMEWORK

The Company has a Risk Management Framework, which provides the mechanism for risk assessment and mitigation.

Forex Business - Risk Management

Corporate & Retail Business : Sale & Encashment of Currency Notes, Prepaid Cards As corporate require a minimum processing time, we are exposed to Credit risk which is mitigated by Customer Acceptance Policy and Credit Policy where customer is profiled as per his business type, market standing, financial strength and limits are fixed and monitored with system level controls.

Outward Remittance Business & Wholesale Business: Sale & Encashment of Currency Notes

There is minimal risk as all Outward remittance transactions are booked back to back with the bank treasury.

Depreciation of Currency has some business impact, as there is postponement of transactions by customers during periods of extreme volatility.

Import & Exports are hedged to minimize exchange volatility through forwards contracts and coverings with overseas supplier / buyer.

INTERNAL CONTROLS AND SYSTEMS

Prithvi Exchange (India) Limited has an adequate system of internal control in place which has been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting as set from unauthorized use or losses, Adhering compliance and regulations to ensure the reliability and integrity of reporting financial information.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

Value based policies have been laid down to attract, train, retain and motivate employees. Your company continuously takes steps to maintain a competitive, healthy and harmonious work environment. As on 31 March, 2023, there were 99 employees in the company.

DISCLOSURE OF ACCOUNTING TREATMENT

The company has adopted Indian Accounting Standards ("IND AS") with effect from April1, 2016. Financial Statements for the year ended 31st March, 2023 have been prepared in accordance with IND AS notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended time to time, read with section 133 and other applicable provisions of the Companies Act, 2013.

DETAILS OF SIGNIFICANT KEY FINANCIAL RATIOS

Particulars 2022 - 2023 2021 - 2022 Variance %
Current ratio 2.06 2.78 -25.92 %
Debt -Equity ratio 0.19 0.14 34.11 %
Inventory Turnover ratio 385.78 280.14 37.71 %
Net Profit ratio 0.002 0.000 2273.91%
Return on Capital employed 0.19 0.01 1399.62%

The above comparison is on Standalone Financial Statement. The details of Key Financial ratios with explanation is provided in Note: 37 of Standalone financial Statement.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include significant changes in political and economic condition.

COMPLIANCE

The Company Continued to vigorously pursue its commitment in adhering to the highest standards ofcompliance. The compliance function in the Company plays a pivotal role in ensuring that the overall business of the Company is conducted in accordance with regulatory prescriptions. The Compliance function on facilitates improvement in the compliance culture in the Company through various enablers like dissemination on of regulatory changes and spreading compliance knowledge through training, circulars and other means of communication on and direct interaction.

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