ranjit securities ltd share price Management discussions

COMPANY OVERVIEW

Established in the year 1994, Ranjit Securities Limited (RSL) has been successful in differentiating itself through customer- centricity, innovation, entrepreneurship, trustworthiness and values-driven operations, while balancing not only our own interest but taking in to account the interests of our customers, employees and civil society.

Over the last year, our strategy has been to make our balance sheet and businesses more resilient and robust to tide over unforeseen uncertainties. Our efforts have shown results and we ended the year with a net profit of ? 18.98 Lakhs and total assets of ? 612.77 Lakhs for Retail and Corporate business.

MACRO-ECONOMIC OUTLOOK

The global economy has seen continued shocks and substantial slowdown since 2020. Indian economy was resilient in the face of this global turmoil and on the path to recovering to pre pandemic levels. Projected to be one of the fastest growing economies at 6.5%-7.0% in FY 2023, India has revived on the back of public spending, private consumption and capital formation.

Despite the critical challenges, India emerged as the fastest growing major economy in the world. The second advance estimate of national income released by the central statistics office (CSO) on 28 February 2023 expects real GDP growth in FY2023 to be 7.0%.

While several advanced economies struggling with banking sector turmoil, bank failures, and contagion risks, the Indian banking and nonbanking financial service sectors remained healthy, and financial markets evolved in an orderly manner, according to the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI).

INDUSTRY SCENARIO

The overall NBFC sector benefited from resurgent domestic economic activity leading to strong momentum in disbursements and bolstering higher business growth. Asset quality indicators have also been improving steadily for NBFCs on the back of higher collections and lower than anticipated slippages on overall book including restructured book.

Notably, most major players are focusing on growing their Retail AUM. As per ICRA, the NBFC-Retail AUM is projected to have grown at 16-18% in FY 2022-23 and expected to further grow at a healthy 12-14% in FY 2023-24. However, margins will be an area of focus as they are expected to remain under pressure in FY 2023-24 which may moderate slightly.

he overall outlook for industry remains positive as India treads on its growth trajectory leading to higher credit demand. The growth in credit is expected to be broad based across products and segments with key risks being elevated interest rates and inflation.

NBFCs in India

The Non-Banking Financial Companies (NBFCs) sector plays a significant role in the Indian economy, providing credit to individuals, small and medium-sized enterprises, and rural areas, among others. NBFCs have emerged as a key segment in the financial sector, bridging the gap between banks and borrowers who are underserved or excluded from traditional banking services. In recent years, the sector has witnessed significant growth, fuelled by a rise in demand for credit and the emergence of new players. The sectors resilience and ability to innovate have been tested during times of economic turmoil, such as the COVID-19 pandemic.

As the economy has moved past the impact of the pandemic, the NBFCs sector is anticipated to experience a substantial growth in both FY 2023 and FY 2024, following the rebound of the economy.

OPPORTUNITIES & THREATS

Our Company constantly monitors the external environments and internal situation so that it is aware of the opportunities and threats that emerge. This enables the Company to tap into the positive prospects that come its way while overcoming or passing the challenge of threats.

Opportunities:

• Unique Business Model helps to minimise risk and operating cost.

• Increasing demand for credit in the Indian market.

• Growth of digital payments and the adoption of digital technologies in the financial sector.

• Diverse loan book and pan-India presence to accelerate growth.

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Threats:

• Increasing competition from local and global players.

• Exposure to various industrial risks like - credit risk, interest rate volatility, economic cycle etc.

SEGMENT-WISE PERFORMANCE

The Company operates only in one segment i.e. Finance services.

OUTLOOK

The Indian economy is expected to witness GDP growth of 6.0% to 6.8% in FY 2023-24, depending on the trajectory of economic and political developments globally, according to the Economic Survey 2023. The survey also projects a baseline GDP growth of 6.5% in real terms in FY 2023-24. The RBI projects headline inflation at 6.8% in FY 2022-23, which is outside its target range. A surge in the growth of exports in FY 2021-22 and the first half of FY 2022-23 resulted in acceleration in production.

The Reserve Bank of India (RBI) also assured that it will continue to balance financial conditions in line with the productive requirements of the economy, even as monetary policy moves decisively to withdraw accommodation. The MPC predicts real GDP growth of 6.5% for 2023-24, with the overall outlook remaining dynamic and fast-evolving.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

RSL has adequate internal controls and standardized operating processes that are envisaged to protect assets and business efficiency. The Company has established strong and well-entrenched internal control procedures commensurate with its size and operations and relevant to its broad domain of the lending business.

The Companys Audit Committee reviews the internal control system and looks into the observations of the statutory and internal auditors. This includes review of policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business and fixing responsibility against all the controls. The management tests the controls across processes and redressal of any deviations in business operations is undertaken. The Audit function provide reasonable assurance regarding the effectiveness and efficiency of operations, safeguarding of assets, reliability of financial records and reports and compliance with applicable laws and regulations.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Financial and operational performance forms part of the Annual Report and is presented elsewhere in the report.

HUMAN RESOURCE

RSL believes that human resources are the foundation on which it can achieve its aspirations and objectives. Accordingly, the Company selects its human resources very judiciously, ensuring that they conform to the Companys culture and follow its values and belief system. The promoters constantly ensure that good governance is a priority and are involved in the management of the company, with strategic inputs from a well-diversified and competent board.

The core management team at RSL, which comprises an adept group of committed resources, is well-equipped to design strategies and execute them so that the Company achieves sustainable growth.

RSL is constantly looking at strengthening its human resources at every level and ensures that its work ethic permeates to the every employee of the Company.

INDUSTRIAL RELATIONS

Companys Industrial relations continued to be healthy, cordial and harmonious during the period under review.

CAUTIONARY STATEMENT

This report contains forward-looking statements extracted from reports of Government Authorities / Bodies, Industry Associations etc. available on the public domain which may involve risks and uncertainties including, but not limited to, economic conditions, government policies, dependence on certain businesses and other factors. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. This report should be read in conjunction with the financial statements included herein and the notes thereto. The Company does not undertake to update these statements.