iifl-logo-icon 1

Raw Edge Industrial Solutions Ltd Management Discussions

37.68
(2.67%)
Jul 12, 2024|03:49:00 PM

Raw Edge Industrial Solutions Ltd Share Price Management Discussions

In terms of Regulation 34 of SEBI (Listing Obligations And Disclosure Requirements), Regulations, 2015 the Management Discussion and Analysis Report (MDAR) is structured as follows:

• Market Trend & Economy

• Opportunities & Threats

• Segment-wise or product-wise performance

• Overview & Outlook

• Risk and Concerns

• Internal Control System

• Financial and operational performance

• Material Development in Human Resources

Some Statements in this discussion may be forward looking. Future performance may however differ from those stated in the management discussion and analysis on account of various factors such as changes in Government regulations, tax regimes, impact of competition, etc.

MARKET TREND & ECONOMY

GLOBAL PRODUCTION OF LIME:

Below table shows country wide world production of Quicklime and hydrated lime, including dead-burned dolomite.

Quantity in 000 tonnes

Country Name 2021 2020 2019 2018 2017 2016
China 3,10,000 3,00,000 3,00,000 3,00,000 2,90,000 2,30,000
USA 17,000 16,000 18,000 18,000 17,800 17,700
India 16,000 16,000 16,000 16,000 16,000 16,000
Russia 11,000 11,000 11,000 11,100 11,000 11,000
Japan 7,000 7,300 7,600 7,580 7,300 7,300
Brazil 8,100 8,100 8,400 8,300 8,300 8,100
Germany 7,100 7,100 7,100 7,000 7,000 6,800
Italy 3,500 3,500 3,600 3,600 3,600 3,600
South Korea 5,200 5,200 5,200 5,200 5,200 5,100
Ukraine 2,300 2,200 2,100 2,100 2,500 2,800
Turkey 4,700 4,600 4,700 4,700 4,700 4,300

Limestone reserves are adequate for most of the countries. China is the largest producer of Lime as can be seen in above table. India is the 3rd largest country in the World in terms of production according to data released by U.S. Geological Survey, Mineral Commodity Summaries. All these countries produce adequate quantity of lime for their own consumption.

According to experts, strongest annual growth of lime is expected to come from China, India, US and other developing countries.

GROWTH OF INDIAN ECONOMY

Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2021-22 is estimated to attain a level of ? 147.36 lakh crore, as against the First Revised Estimate of ? 135.58 lakh crore for the year 2020-21, released on 31.01.2022. The growth in GDP during 2021-22 is estimated at 8.7 percent as compared to a contraction of 6.6 percent in 2020-21 according to data released by the National Statistical Office.

Nominal GDP or GDP at Current Prices in the year 2021-22 is estimated to attain a level of ? 236.65 lakh crore, as against ? 198.01 lakh crore in 2020-21, showing a growth rate of 19.5 percent.

GDP at Constant (2011-12) Prices in Q4 2021-22 is estimated at ? 40.78 lakh crore, as against ? 39.18 lakh crore in Q4 2020-21, showing a growth of 4.1 percent

The growth is mainly due to the companies rearranging their operations and recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. Your Company has been continuously striving to keep its costs to minimum possible to aggressively complete with Indian & global competitors. Moreover, slowly India is getting competitive with respect to global manufacturers, as global environmental rules are becoming stringent like that of India.

OPPORTUNITIES & THREATS

Many developments in Indian economy as triggered by globalization as one world market are under cut-throat competitions, the prime opportunity lies in meeting customer’s raised expectation in terms of high quality with value added products, prompt response, timely delivery, proper services and performance and the same opportunities were regularly grabbed by your company since its inception.

The growth in Lime sector is dependent upon the growth in various industries utilizing Lime. Industries such as Steel & Iron, Water Treatment, Chemicals, Pharmaceuticals, Paper & Pulp, and Construction etc. are some of the core consumers of Lime products, all these industries are growing within its own domain leaving a growth path for Lime Industry in India.

Your company strives to maintain pace with the fast development in the Indian economy, tremendous competition and latest in technology and know-how with its limited resources.

The threats, which Lime industry generates sludge and dusting and its impact on environment and competition from the global market. However, India has enough lime resources with good quality accepted in international market, which is expected to fetch sizable foreign exchange in time ahead.

Assessing the impact assessment of COVID-19 is however a continuing process given the uncertainty associates with its nature and duration. The Company will continue to closely monitor any material changes to future economic conditions.

SEGMENT WISE OR PORDUCT WISE PERFORMANCE

F.Y. Hydrated Lime Others Transportation Revenue Total
2021-22 38,23,52,999 2,93,44,914 3,56,54,229 44,73,52,142
% 85.47% 6.56% 7.97% 100%

OVERVIEW & OUTLOOK

The Company is highly competitive in selection of raw material from high quality limestone. For this, the Company mainly depends on raw material to enable to produce quality material according to customers’ requirements. The Company gives importance to satisfaction of customers and their support in the long term. There are inherent opportunities available to the Company to which it is catering for many decades such as hydrated lime, quick lime, lime fines and other value added products and optimistic to achieve good results.

The company has continued its efforts on enhancing its product profile and customer segments which have helped it improve upon the margins across all its product segments. The steps taken by the company in terms of improving the operational capabilities and targeting value-added products has helped it cater to niche customers and improve its customer profile. This has helped the company to partly off-set the adverse impact of lower volumes to some extent. A close watch on the receivables and inventories helped the company avoid any major mishaps in form of bad debt or stock losses. The company also made focused efforts for better working capital management and brought down the levels of inventories, receivables and payables by exercising tighter controls.

RISK AND CONCERNS

The Company has established a well-defined process of risk management, wherein the identification, analysis and assessment of the various risks, measuring of the probable impact of such risks, formulation of risk mitigation strategy and implementation of the same takes place in a structured manner. Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company.

Various activities undertaken to achieve the goals make the Company susceptible to various risks. It has to be recognized that risks are not merely the hazards to be avoided but, in many cases, offer opportunities which create value ultimately leading to enhancement of shareholders wealth, and ensuring sustainability of operations.

INTERNAL CONTROL SYSTEM

The Company has in place an adequate system of internal control commensurate with its size and nature of its business. These have been designed to provide reasonable assurance that all assets are safeguarded and protected against loss from unauthorized use or disposition and that all transactions are authorized, recorded and reported correctly and the business operations are conducted as per the prescribed policies and procedures of the Company. The Audit committee and the management have reviewed the adequacy of the internal control systems and suitable steps are taken to improve the same.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFOMRMANCE

We are already excelling in area of manufacturing lime and also endeavouring in allied activities. The coming few years will be exciting and challenging at the same and your company will continue to strive for excellence with economic value addition. Your Company has recorded total revenue of Rs. 44,73,66,472/-, Net Loss for the Financial Year stood at Rs. 56,51,929/- and recorded an EBIDTA of Rs. 3,38,10,040/- as standalone basis for the financial year as on 2021-22.

Financial performance of the Company for Financial Year 2021-2022 is summarized below:

(Figure in rupees)

Particulars 2021-2022* 2020-2021*
Revenue from operations 44,73,52,142 43,91,17,362
Other Income 14,330 -
Total revenue 44,73,66,472 43,91,17,362
Profit before tax and Exceptional items (74,44,335) (71,72,736)
Exceptional items - -
Profit/ (Loss) before tax (74,44,335) (71,72,736)
Less: Tax Expenses
- Current Tax - -
- Deferred Tax (17,92,406) (21,77,337)
- Income tax of Previous years
Net Profit/ (Loss) For the Year (56,51,929) (49,95,399)

* Figures regrouped wherever necessary.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

Our Company firmly believes that its human resources are the key enablers for the growth of the Company and important asset. Hence, the success of the Company is closely aligned to the goals of the human resources of the Company. Taking into this account, your Company continued to invest in developing its human capital and establishing its brand on the market to attract and retain the best talent.

Employee relations during the period under review continued to be healthy, cordial and harmonious at all levels and your Company is committed to maintain good relations with the employees.

SIGNIFICANT CHANGES

(1) Debtors Turnover

Debtors turnover ratio reduced from 2.06 times of Revenues in FY.21 to 1.77 times of Revenues in FY.22.

(2) Inventory Turnover

Inventory turnover ratio stood at 5.22 in FY.22 as compared to 5.73 in FY.21.

(3) Interest Coverage Ratio

Interest coverage ratio stood at 0.67 in FY.22 as compared to 0.63 in FY.21.

(4) Current Ratio

Current Ratio reduced from 1.35 in FY.21 to 1.23 in FY.22.

(5) Debt Equity Ratio

Debt Equity Ratio stood at 1.08 in FY.21 as compared to 1.08 in FY.22.

(6) Operating Profit Margin (%)

Operating profit margin has increased from 2.73% of revenues in FY.21 to 3.32% of revenues in FY.22.

(7) Net Profit Margin (%)

Net profit margin (PAT) has reduced from -1.63% of revenues in FY.21 to -1.66% of revenues in FY.22 on account of increased Finance Cost.

(8) EBTIDA Margin (%)

EBTIDA Margin stood at 7.56% in FY.22 as compared to 7.77% in FY.21.

RETURN ON NET WORTH AS COMPARE TO IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

Return on net worth stood at -2.52% in FY.22 as compared to -2.18% in FY.21.

CAUTIONARY STATEMENT

The report may contain certain statements that the Company believes are, or may be considered to be "forward looking statements" that describe our objectives, plans or goals. All these forward looking statements are subject to certain risks and uncertainties, including but not limited to, government action, economic development and risks inherent in the Companys growth strategy and other factors that could cause the actual results to differ materially from those contemplated by the relevant forward looking statements.

For Raw Edge Industrial Solutions Limited
Date: 12th August, 2022 Place: Surat Sd/- Sd/-
Bimalkumar Rajkumar Bansal Sourabh Bimalkumar Bansal
Managing Director Director
(DIN:00029307) (DIN:00527233)

Knowledge Centerplus
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Knowledge Centerplus

Follow us on

facebooktwitterrssyoutubeinstagramlinkedin

2024, IIFL Securities Ltd. All Rights Reserved

ATTENTION INVESTORS
  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

RISK DISCLOSURE ON DERIVATIVES
  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

plus
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.