Raj Rayon Inds. Management Discussions


The global economy witnessed lower growth rates in 2022 after significant growth in 2021. Global real GDP is estimated to have grown at 3.4% in 2022 compared to an increase of 6.2% in 2021. Emerging market GDP growth rate, though higher than the global rate, is significantly lower than the growth witnessed last year. Emerging markets grew by 3.9%, a number slightly higher than in pre-pandemic era. Advanced economies witnessed a similar trend and grew by 2.7%. Due to lower growth rates and high inflation concerns globally, there has been a slow-down in global consumption.

FY2023 was a challenging year in many ways. The world economy was just settling down post the COVID pandemic when the Russia-Ukraine conflict caused a disruption. The major economies of the world witnessed an unprecedented energy crisis as the energy costs of energy increased manifold in Western countries. This led to record high inflation, lower disposable income in the hands of the masses and to poor demand in these economies.

Due to the economic downturn in neighbouring countries with large garment manufacturing set-ups, the Company reduced its business with them on account of the business risks involved. All these factors combined to have an adverse effect on the Company as a whole and more specifically in the downstream businesses of bedding, towels, and apparel fabrics.

Indias economy was also affected by the global macro factors; however, India has still outperformed the global average due to strong domestic demand fundamentals. The real GDP has grown by 6.8% in 2022 compared to a growth of 8.7% in 2021. The Indian economy is expected to grow at a sustained pace with the risk of pandemic reduced especially for domestic demand. Retail inflation reached 7.79% in April 2022, above the medium-term target of 6% of the RBI. To tackle the rising prices, RBI hiked the repo rate six times in FY 2022-23, from 4% at the beginning to 6.5% at the close of the financial year.

Overall Index of Industrial Production (IIP) of India as of January 2023, has been recorded at 146.4, 5.2% higher than the values in January 2022. Average overall IIP in 2022 was significantly higher than last years average, depicting a boost in the manufacturing in India.

For the textile and apparel industry, manufacturing has declined in the year 2022 as a result of lower global demand. Subsequently, Index of Industrial Production (IIP) has declined by 21% for apparel and 12% for textiles in the period 21-Dec, 22. The IIP levels in year 2022 have been on a gradual decline post March. The offtake for apparel in US and EU markets were subdued in 2022 as a result of high inventory build-up by US brands and retailers caused by supply chain issues. Further, inflationary pressures have slowed the market causing ripple effect on the supply chain and manufacturing. As the inflation subsides and interest rates start to decline, the demand is expected to increase and positively impact textiles and apparel manufacturing.

With the increasing purchasing power and a flourishing middle-class population in India, consumer confidence index is on a constant rise and has grown from 63.7 in January 2022 to 84.8 in January 2023. To further meet demands of global buyers, the Indian government is also focusing on infrastructure spending and encouraging industries to invest through various schemes like PLI across industries, which will further facilitate growth in the economy in the future.



The black swan event has affected the Indian textile & apparel industry, in terms of both trade and domestic consumption. The spread of the virus initiated in China has made the world rethink on their supply chain plans and most of them are likely to opt for India as an obvious option to china since especially now that the socio-political situation in china going further south. The Indian government is also realising the potential and has announced PLI scheme for the synthetic textile industry which will give a major boost of confidence to potential buyers from Europe and US. The EU and the US, which are huge markets for textile & apparel products are likely to become key partners of India in the near future.

China plus one policy, Economic collapse / volatility in Sri Lanka, Myanmar, Bangladesh, and Pakistan has played out in favour of India as the world has started looking at India as reliable partner for their requirement.

Emergence of new Markets: FTA with Australia, Comprehensive Economic Partnership Agreement (CEPA) with UAE and expected favourable trade agreements with UK / Europe present an opportunity for textile manufacturers to expand into new markets and diversify their customer base.


The major threat lurking today is the volatile situation in Ukraine and Taiwan. After nearly two years of pandemic disruption, the fashion & textile industry is once again finding its feet. Companies are adapting to new consumer priorities, and digital is providing a nexus for growth. Still, the industry faces significant challenges amid supply-chain disruption, patchy demand and persistent pressure on the bottom line. The Company will strive to remain fundamentally strong by way of reducing costs and maintain only sustainable debt.

The industry is expected to weather the challenges and is expected to generate revenue and employment in a global perspective.

Labour force and employment:

The Textile Industry provides direct employment to over 50 million people. Even though the pandemic had disturbed the labour and employment situation, it is back on its feet with a renewed vigour and work from factory and office is back on the cards for most corporates.

Import & Exports of raw material and readymade garment:

The High sea freight costs have adversely impacted exports globally and Indian textile importers have turned to domestic suppliers, thereby increasing demand locally and digital platforms.


The Company operates in the segment of Manufacturing and Marketing of Synthetic Textiles Yarns. OUTLOOK

The Company expects to be on a profitable growth thrust on gearing up of operational activities at production levels.


• RRILs well-defined organisation structure, policy guidelines, predefined authority levels and an extensive system of internal controls, ensure optimal utilisation and protection of resources, IT security, accurate reporting of financial transactions and compliance with applicable laws and regulations.

• RRIL has adequate system of internal control in place to ensure that assets are safeguarded against loss from unauthorised use or disposition, and that transactions are authorised, recorded, and reported correctly.

• RRILs internal audit function is empowered to examine the adequacy, relevance and effectiveness of control systems, compliance with laws, regulations and policies, plans and statutory requirements.

• RRIL has a strong budgetary control system. Actual performance is reviewed with reference to the budget by the management on an ongoing basis.

• RRILs Audit Committee of the Board reviews the findings and recommendations of the internal auditor.

The system is improved and modified continuously to meet changes in business conditions, statutory and accounting requirements.


During the financial year under review the Company has earned total revenue of Rs. 13,766.79 /- Lakhs as compared to the previous years revenue of Rs. 5.54/- Lakhs. The Company has incurred a loss of Rs. 1,237.68 /- Lakhs after considering exceptional items as compared to the previous years Net Profit of Rs. 64077.36 Lakhs.

The net worth of the company became positive due to written off the loans pursuant to resolution plan approved by NCLT.

Research & Development:

The Company always strives to be innovative and cost competitive, aided by its fully equipped R & D facilities. It will gain support from its parent company by way of market feedback on demand and immediate feedback on the quality so that the company can develop product specifications and quality as per requirements of the market. Besides producing micro fibre and regular POY of Denier range fine to coarse, the Companys has the flexibility to produce various products like Full Dull, Semi Dull, Bright Yarns, Doped Dyed Yarn, recycled yarns, Fire Retardant and Anti Microbial yarns.

Quality Management:

RRIL gearing up to ensure that product quality is comparable to the best in the industry and quality improvement measures are being put in place to enhance quality of its various polyester yarns and polyester chips as per customer requirements.

Environment and Safety:

Being conscious of the need for environmentally clean and safe operations, the Company conducts its operations ensuring safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.


The Company recognises that human resource is considered as the most valuable of all resources available to the Company. The Companys focus is on developing the most superior work force so that the Company and individual employees can accomplish their work goals in service to customers. The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance.

The Companys strategy for development of Human Resources is through providing a motivating work environment, recruiting the best talents, providing challenging goals and by creating a culture for learning and growth. Industrial relations remained cordial at the plants.


The Company was under Corporate Insolvency Resolution Process in the year under review and is in path of initiating the process for operational activities to start on full stretch basis and soon it will come out of the progress on plans for the safeguarded the interest of shareholders.

In view of management, the broader trends in the economy are expected to have a direct impact on your Companys growth prospects as well as on stage of transforming the business in different textile products. Inflation is expected to remain elevated for the foreseeable future, driven by war-induced commodity price increases and broadening price pressures. In addition, the anticipated increase in interest rates by Central Banks in the coming year are also expected to lower growth and exert pressure on economies particularly those in emerging markets.

In these circumstances, the ability to successfully navigate cost pressures would have a significant bearing on the overall performance of your Company. Diminishing purchasing power and affects demand due to the economic circumstances may adversely impact the market for textiles and apparel resulting in the movement to value-for-money options which will result in higher volumes but lower profitability in commodity products.


In accordance with the SEBI (Listing Obligations and Disclosures Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector-specific financial ratios.

Ratios 2022-23 2021-22
Debtors Turnover 5.95 0.01
Inventory Turnover 2.09 0.00
Current Ratio 0.93 1.96
Debt Equity Ratio 1.20 0.00
Net Profit Margin (%) -9.02% -552.14%
Return on Net Worth (%) -6.50% 11.11%

details of any change in Return on Net Worth (%) as compared to the immediately previous financial year along with a detailed explanation thereof.


Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Companys operations include raw material availability and its prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business, if any and other ancillary factors.