Global Economic Overview from Indian Perspective:
In the year 2023, Global real GDP is expected to grow by 2.9% compared to 3.3 % in
2022. Higher inflation and interest rates may continue to create pressure and the Global
GDP could slow down to 2.5%. Having said this, India has its own dynamics and is expected
to witness a GDP growth of 6% in comparison to the Global GDP growth of 2.5%. Crude prices
are likely to remain soft adding ease to the growth of Indian Economy. From Global
perspective, following two predominant risks may impact the economy and India may not be
completely insulated from the same.
The first global risk relates to a potential failure to bring inflation back to the
targets fixed by Central Banks of Developed Economies. While broad inflation index has
peaked in most economies, core inflation (excluding volatile items such as food and
energy) has not significantly turned lower in many economies. In India, this could be
because of rapid privatization of Energy distribution companies and Government philosophy
to turn them profitable instead being a support to the Industry. The ongoing war in
Ukraine and Israel is continuing to place upward pressure on food and energy prices. If
the conflict persists and climate events continue to negatively affect crops, then food
prices may remain elevated as a new normal. The rise in food and energy cost may have
negative effect on consumer spending globally as well as India.
The second global risk relates to central banks leaving policy rates higher for longer.
The potential for unyielding upward pressures on inflation suggests that interest rates
may generally be higher over the next few years compared to last decade. This means a
higher cost of capital for business and financing for consumers, which may cause global
real GDP growth to be slower than anticipated. It impacts consumer spending and a higher
cost of carrying revolving unsecured debt through their Credit Cards. From Indian
perspective, a steep rise in issuance of Credit Cards had added to the demand but this was
a transient phase and shall fade out due to higher cost of carrying such unsecured debts.
Indian Economic Overview:
India is expected to grow very rapidly compared to other countries. After rapid
economic growth of 7.2% in the 2022-23 fiscal year, economic momentum has remained strong
in the April-June quarter of 2023, with GDP growth of 7.8% year-on-year (y/y). India has
also shown resilience in the manufacturing sector and is holding 4% growth rate. India has
also become an increasingly attractive location for multinationals across a wide range of
industries, with foreign direct investment inflows (FDI) having reached a new record high
of USD 85 billion in the 2021-22 fiscal year. This necessarily shows that India shall
outperform its global peers in time to come. In this year private consumption has also
shown a growth of 6.0% year on year negating the effect of high capital cost. Since Your
Company is in Packaging business, it is very important to understand the Indian outlook on
retail industry. Retail Industry is directly connected to consumption and packaging
Industry.
Indian Conventional Retail and Online Retail Industry Outlook:
Indian retail industry accounts for more than 10% of Indias GDP. The market after 2021
has been an eye-opening time for the Indian retail sector. The industry saw a decline of
8.5% in FY 2021, but it recovered in 2022 to reach $836 billion with 81.5% contribution
from traditional retail. However, the COVID-19 disruptions led to a rapid increase in e-
commerce and digital adoption. Now, brands across segments are concentrating on increased
online presence and direct sales as customers continue to shop online.
Quite interestingly, shoppers from Tier II and Tier III cities make up over 61 percent
of the total market share in FY 2022 in comparison to 53.8 percent in FY 2021. While Tier
I cities have a lesser growth rate for e-commerce at 47.2 percent, tier II and III cities
showcased growth of 92.2 percent and 85.2 percent, respectively. This trend is likely to
continue. Online retail sale in India is expected to grow at approximately 35% per annum.
Since one of the businesses of the company had been Direct Selling, it is important to
talk about the employment trend in the country. A declining and non-fulfilling job
scenario is breeding ground for "Alternative Business Opportunity".
The Employment Outlook in India:
This Trend in India for 2023-24 is generally positive, with growth expected in several
sectors. The IT and ITES sectors are expected to continue to be the major drivers of job
growth, with other sectors such as manufacturing, healthcare, and retail also seeing
strong demand for talent. The employment trend in India seems to be improving on a
month-on-month basis. However, when viewed through a year-on-year lens, the index showed
an 8.6 per cent decline. Decline in employment gives rise to aspiration towards
alternative incomes.
Rising pressure from Organized Retailers on Kirana and Pharmacy Stores:
Disruption in traditional distribution system is also creating unemployment. There are
approximately 1.2 Crore Kirana or traditional retail stores in India which are facing
immense competition from Organized retailers. Similarly traditional pharmacy shops are
facing competition from Government schemes like "Ayushmaan Bharat", wider
popularity of generic drugs and entrance of online pharmaceutical platforms like 1mg,
PharmEasy, Redcliffe labs, Healthians, Practo etc. The only thing holding these players in
market is their personal relationships and marketing skills.
Business Outlook of FMCG Industry:
With household goods and personal care products amounting to up to 50 percent of FMCG
sales in the country, the FMCG sector has proven to be Indias fourth-largest
income-generating sector. The evolution in the lifestyle of Indians across the semi-urban
and rural segments has primarily contributed to the surge in revenue generated by the FMCG
sector in the country. While the urban segment of India contributes to almost 55 percent
of FMCG sales, there has been a faster and broader growth for the FMCG sector in rural
India. As a result, almost 50 percent of the money spent in rural India has been spent on
an FMCG product. With a growth rate of 14.7 percent, the FMCG sector has been projected to
grow to a market size of almost US$ 220 billion by 2025. Government schemes providing
liquidity to rural population also adds to the growth of FMCG industry.
Smaller Brands are Evolving to Reach a Wider Audience
No longer is the FMCG sector a space occupied only by the big companies and brands that
have always been around. The past year made the masses realize the importance and
potential of running their own business. The past year saw a sudden increase in homegrown
brands that promise to deliver chemical-free, all-natural FMCG products. The COVID
educated, environmentally aware consumer base shifted their loyalty from big brand names
to smaller newer brands and products. The ease of selling their products digitally or via
social media made the private labels brands capture a substantial market size in a
relatively short time.
Selling Through Communities
Like other sectors, the FMCG sector is evolving through recommendations and word-of-
mouth sales. Research and market studies showed that almost 57 percent of shoppers buy a
particular brand based on the recommendation by someone they know and trust. Building a
community through brand ambassadors and targeting to get sales through that channel has
helped private and prominent brands in the FMCG sector make sales in the past year.
Direct and Doorstep Delivery
The profit margin in direct selling to the end consumer has tempted even the big brands
to set up a direct sales channel on multiple digital marketplaces and even set up stand-
alone websites and stores. To add to the online marketplace, most brands have started
delivering their products directly to the consumers doorstep. Brands with dedicated
websites for consumer sales have reported an 88 percent rise in year-on-year consumer
demand in the past year.
Environmentally and Socially-Friendly Brands
Climate change and a brands contribution to the environment have always been under
scrutiny, but with the pandemic, most of the countrys population evolved their buying
habits and decisions based on how much a brand spends to give back to the community and
how environmentally friendly the brand can be.
Industry Overview of Packaging Industry:
The India Packaging Market size is expected to grow from USD 75.97 billion in 2023 to
USD 128.36 billion by 2028, at a CAGR of 11.06% between 2023 and 2028. The demand for
packaging in India has expanded drastically, spurred by the rapid growth in consumer
markets, especially in processed food, personal care, and pharmaceutical end- user
industries. Packaging is Indias one of the fastest growing sectors. Over the last few
years, the industry has been a key driver of technology and innovation, contributing to
various manufacturing sectors, including agriculture and the fast-moving consumer goods
(FMCG). The packaging industry is driven by the factors such as rising population,
increasing income levels, and changing lifestyles are anticipated to drive consumption
across various industries leading to higher demand for packaging product solutions.
Moreover, demand from the rural sector for packaged products is fueled by the growing
media penetration.
What is Sustainable Packaging?
Sustainable Packaging is the packaging, which produces most negligible impact on the
environment and leaves least footprints. As if the packaging never existed. It includes
Polyolefin based multiwall structures, Paper based Multiwall structures and variety of
coatings that provide barrier and protection but are degradable.
Shift from Poly olefins towards Paper Packaging:
The paper packaging business has witnessed growth over the last decade due to changes
in substrate choice, new market expansion, ownership dynamics, and government initiatives
to ban plastic. Sustainability and environmental issues continue to be emphasized, and
various innovations catering to paper packaging are expected to drive the markets growth
in India.
Need for Barrier Properties in Paper Packaging:
Due to their unrivaled performance profile, advanced paper and board packaging
structures with PVDC coatings are used to package bakery products, freeze-dried products,
and water-sensitive materials, such as salt or bicarbonate and many more. The portfolio of
solutions offered by our company provides an effective barrier against the migration of
contaminants into packaged foods, such as mineral oil (MOSH, MOAH) and other
non-intentionally added substances. This protective feature is coupled with an improved
sustainability profile compared to other Polyolefin based alternatives.
Let us now look at what your company can offer to the next generation requirement of
functional, attractive and sustainable packaging. Let us see the products and difference
that your company is going to create in the market.
Company Overview
Radha Madhav Corporation Limited has next generation manufacturing facility targeting
Beautiful, Functional and Sustainable Packaging. However the manufacturing asset is in
non-working condition and needs major overhaul. We have already begun working on
refurbishment and overhauling. Once completed, your company would have the most
sophisticated infrastructure to produce sustainable packaging for varied application.
Companys offerings in Pharmaceutical Packaging
Global Pharmaceutical Packaging Market was valued at over USD 110 billion in 2022 and
is anticipated to grow at a CAGR of over 13% between 2023 and 2032. The shift from
ordinary packaging to sustainable packaging can create a huge demand for the company.
Indian pharmaceutical packaging market is projected to reach around US$ 3.25 Billion by
2030, in terms of revenue, exhibiting a CAGR of 9.7% during the same period.
• PVDC Coated Blisters: Thanks to high prices of Aluminum in
"Alu-Alu" structure and its inherent limitation of being non-recyclable, PVDC
coated PVC that is 100% recyclable and offers excellent MVTR and OTR properties is gaining
immense popularity. In developed nations, PVDC coated blisters are used as the most
popular form of packaging tablets and capsules. Company can manufacture Duplex and Triplex
structures on its state of the art Pagenderm Calico 4 Station machine.
• Recyclable Collapsible Tubes: Conventional Collapsible tubes are not
recyclable due to the presence of Aluminum foil in the structure. Your company has the
facility to reverse print one substrate and Extrusion laminate it with 30 micron BOPP film
to make sturdy, functional, economical and beautiful tubes for packaging of ointments,
creams and pastes.
• Barrier paper for packaging of Effervescent Salts: Conventional Packaging
for Effervescent Salts includes Aluminum foil. Thanks to our state of the art printing,
Pagenderm Calico 4 Station Coater and Graco Tandem Extruder, We can make highly
functional, beautiful and economical packaging for effervescent salts.
• Folded Cartons with Barrier properties: Our machinery can coat thick sheets
and board with PVDC and other barrier latexes. Coated Board is offset printed and
converted into small boxes for tablets, capsules etc. Packaging is economical as well as
functional.
Companys offerings in Food Packaging:
The Food Packaging Market size is expected to grow from USD 352.38 billion in 2023 to
USD 432.04 billion by 2028, at a CaGr of 4.16% during the period between 2023 and 2028.
The India Food & Beverage Packaging Market size is expected to grow from USD 33.73
billion in 2023 to USD 46.25 billion by 2028, at a CAGR of 6.52% during the period between
2023 and 2028.
• Edible Oils: Conventional 1 liter pouches have been packed in a laminated
structure involving a thermoset plastic layer called BOPET. This thermoset BOPET does not
melt on heating and hence becomes non-recyclable. We offer state of the art poly poly
structures, extruded on best global machines and duly printed on high quality CI Flexo
presses. These layers are gummed together on state of the art laminators. Our structures
have barrier properties and are recyclable.
• Snacks and Packaged Food: Our laminates provide higher barrier properties
and low stress cracks, leading to enhanced shelf life of products. We have created Multi
wall Barrier paper structures that are degradable, economical and aesthetically appealing.
• Ready to Eat: Our ready to eat or retort pouches are free from aluminum
foils and thermoset BOPET, hence making them recyclable and economical
• Flour and Grocery: Our barrier tubes are surface printed eliminating the use
thermoset BOPET, lamination etc. The state of the art barrier tubings are printed on
turner bar CI Flexo presses. These are economical, functional, recyclable and beautiful.
• Mouth Fresheners and Pan Masala: Governments ban on plastic packaging in
Pan Masala has opened up a huge potential for our Barrier paper. Multiwall barrier paper
structures are used for packaging of Pan Masala. This packaging is highly functional,
biodegradable, free from plastic and beautiful.
Companys offering in FMCG Packaging
As of 2022, the global FMCG Packaging market was estimated at USD 682 Billion, and its
anticipated to reach USD 1.02 Trillion in 2028, with a CAGR of 7.09% during the forecast
years. Packaging consumption in India has surged by 200 percent in the last decade, from
4.3 kilograms per person per annum to 8.6 kg per person per annum. Demand in the Indian
market is projected to grow at a robust 7.3% CAGR between 2023 and 2028.
• Bathing Soaps: Bathing soaps are conventionally packed in BOPET + Paper or
BOPET + Polyolefin structures. Our company offers completely biodegradable barrier paper
based structures that provide sufficient barrier to retain moisture and aroma of the soap.
These structures are completely biodegradable and are aesthetically beautiful.
• Toothpaste and Shaving Creams: Conventionally Toothpaste and Shaving Creams
are packed in Laminated structures including Aluminum foils. Due to the presence of
Aluminum foils, the empty tubes are not recyclable. We offer reverse printed Lamitubes
with 30 micron BOPP Sheet sandwich laminated with other structural films. These structures
are functional, economical and recyclable.
• Laundry: Detergent Cakes, Powders and liquids consume substantial quantity
of non-recyclable packaging. We have arena of biodegradable, recyclable and sustainable
packaging for the same.
• Biodegradable Bags: Carry Bags for simple transportation and shopping are a
big source of pollution. We offer Paper bags, Biodegradable bags and many other solutions
to replace conventional plastic bags.
Technology Edge
To cater to the new and promising demand of sustainable packaging, next generation
technology has to be adopted. Thanks to the manufacturing facilities of your company, we
have state of the art equipments from renowned suppliers like Reifenhauser, Bobst, Dolci,
Battenfield, Pagenderm, and Techno Coating Engineering etc.
• Double Bubble Technology: This technology allows making very thin films as
less as 10 micron. As tall as 11 story building, both stable and unstable films can be
manufactured on this machine using German and Italian technology. Making thin film with
expensive material gives better yield and brings economies in the product.
• Barrier Extrusion Technology: We have technology to extrude barrier polymers
like EVOH, Nylon etc. Our technology helps us extrude minimum thickness of tie layers and
the barrier polymer economizing our cost and also making the product easy in recycling.
• Barrier Coating Technology: Our 4 Station Pagenderm Coating machine enables
us to coat barrier materials like PVDC on host of substrates including Polyolefin,
Polypropylenes, PVC Sheets and Paper. Coating imparts substantial barrier properties and
safeguards the product from perishing for long periods of time.
• Tentre Frame Technology: Our Austrian technology provides us the ability to
make high definition shrink film substrate for the first time in India. The film shrinks
upto 80% in transverse direction and less than 3% in longitudinal direction. Such films
are used in making decorative sleeves.
• Calendaring Technology: We have 5 Roll and 3 Roll Calendaring Machine for
Soft and Hard PVC sheet manufacturing. These are top end machines and provide extreme
accuracy in thickness and thermo formability.
• Printing and Lamination Technology: We have host of Roto Gravure and Central
Impression Flexo printing machines. Apart from this, we also offset printing presses. We
can print all substrates at remarkable speeds and accuracy. Most of our machines are
electronic line shaft machines running at more than 500 meters/min.
Industry Structure and Development
The recent global economic situation has witnessed immense highs and lows including
some unfortunate happenings. Timing is the most important factor while trading. This
fluctuates on rapid basis. According to experts most of the time markets have overvalued
or undervalued. With the help of Indian market today one need to test ones financial
knowledge, analytical capabilities, thought process and mental strength.
Discussion on financial performance with respect to operational performance
The Company earned a Total Income of Rs. 1.96 millions during the FY 2022-2023. The
Companys Net loss for the Financial Year ended March 31, 2023 stood at 218.15 millions
Segment-wise or product-wise performance
During this period a very large number of shops, depots and warehouses have been put in
place. All these distribution points have been integrated on central processing system.
Outlook
Radha Madhav Corporation Ltd remains confident of the long-term growth prospects &
opportunities ahead of it in its business.
Internal control system and adequacy
The system of internal control has been established to provide reasonable assurance of
safeguarding assets, maintenance of proper accounting records in compliance with
applicable Laws and Regulations to ensure reliability of financial statements and reports.
The Statutory Auditors and the Audit Committee review all financial statements and ensure
adequacy of internal control systems.
Opportunities and Threats
The strength of a company is known from sound advices. It also depends on the
Government policies of taxation. Introduction of GST may give a big boost to the market.
Risks Management
Risk evaluation and management of risk is an ongoing process in the company.
Human Resources
The Company believes that its competitive advantage lies within its people. The
Companys people bring to the stage multi-sectoral experience, technological experience
and domain knowledge. The Companys HR culture is rooted in its ability to subvert ageold
norms in a bid to enhance competitiveness. The Company always takes decisions which are in
alignment with the professional and personal goals of employees, thereby achieving an
ideal work-life balance and enhancing pride association.
Details of Significant Changes in key financial ratios, along with detailed
explanations therefor:
| - Debtors Turnover : |
6.03 |
| - Inventory Turnover : |
153.03 |
| - Interest Coverage Ratio : |
Nil |
| - Current Ratio : |
12.22 |
| - Debt Equity Ratio : |
Nil |
| - Operating Profit Margin : |
-11,930.11 negative figure |
| - Net Profit/Loss Margin : |
-12,394.89 negative figure |
Details of change in Return on Net Worth as compared to immediately previous financial
year along with the detailed explanation thereof
RoNW (FY 2022-23): (2.64%)
RoNW (FY 2021-22): (2.58%)
RoNW (FY 2020-21): (0.27%)
Return on Net Worth has decreased during the financial year under review as compared to
the previous financial year due to reduction in turnover.
Cautionary Statement
Statements in the Management discussion and analysis describing the companys
objectives, projections, estimates and expectations may be "forward looking
statements" within the meaning of applicable laws and regulations. Actual results
could differ materially from those expressed or implied. Important factors that could make
a difference to the companys operations include economic conditions affecting
demand/supply and prices, conditions in the domestic and overseas markets in which the
company operates/ going to operate, changes in government regulations, tax laws and other
statutes and other incidental factors.
| For and on Behalf of the Board of Directors of |
|
|
| Radha Madhav Corporation Ltd |
|
|
|
Sd/- |
Sd/- |
|
Nitin Jain |
Vijay Patel |
| Date: December 8, 2023 |
Whole Time Director & |
Director |
| Place: Daman |
CFO |
DIN:07505750 |
|
DIN:09833381 |
|
+91-9892691696
