Remi Edelstahl Tubulars Ltd Management Discussions.

(a) Industry Structure and Development:

The growth in the product markets have shifted from the traditional focus on oil and petrochemical sector to the power sector. This shift stands to become more prominent in the next few years as the installation of nuclear power plants becomes more critical for the growth of the economy. The Stainless steel tube and pipe industry can be classified in the organized sector, in which the Company operates has witnessed a sharp growth in capacity over the past few years. However, due to slowdown in Indian economy in general and capital goods industry in particular, these are challenging times for the industry.

(b) Opportunities and Threats:

The government is taking steps to revive the economy, we are hopeful that the economic environment will improve, customer sentiment will turn positive and the industry will see better growth in coming times. The growth in the power, both thermal & nuclear, fertilizer, oil and petroleum sector offer opportunities for the Companys products. However, the pricing volatility of key raw material ingredients (such as nickel) can affect demand and usage patterns of user industry as well as affect the viability of major project investments. Apart from this, installation of LNG terminals can have a substantial contribution in the usage of stainless steel tubular products. The dumping of secondary quality products, imports of S.S. Pipes under FTA continuous to be a threat and can have an adverse impact on demand of locally manufactured products. The Government of Indias Policy of Aatmanirbhar Bharat to promote local manufacturing will help the industry to grow.

(c) Outlook:

The Stainless Steel Tubular industry has strong fundamentals and the management rmly believes that this is an essential product required during the further industrialization of the country. The Companys product range is catered to meeting the demand for value added products is going to give the Company a chance to participate in the specialized markets which are currently dominated with few manufacturers. The approvals received from users abroad will help in redevelopment of an export market which is currently negligible in the Companys portfolio. However, due to Covid-19 pandemic, situation is very challenging and it is still evolving which will affect the industry adversely in the short term.

(d) Risk and Concerns:

The global environment continues to be marked by economic volatility. The uncertainty in the international and domestic markets due to COVID-19 pandemic may affect demand. It may also have a further impact on the Indian Rupee, which would make imports more expensive. The Company, however, is taking suitable steps to ensure protection of its margins as and when required. The high rate of interest and uncertain monsoons may continue to dampen the investment scenario in India.

(e) Internal Control Systems and their adequacy:

The Company has adequate internal control systems in technical and financial elds.

(f) Financial Performance:

The Financial Performance of the Company has been impacted in last quarter of the year due to covid-19 pandemic.

(g) Human Resources/ Industrial Relations:

The Company has maintained good industrial relations and has maintained harmonious relations with the employees.

(h) Cautionary Statement:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be "forward looking statements" within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events. 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 global and domestic demand and supply, finished goods prices in the domestic and overseas markets in which the Company operates, raw-materials cost and availability, changes in Government regulations, tax regimes, economic developments within or outside India and other factors such as litigation and industrial relations. The Company assumes no responsibility to publicly amend, modify or revive any forward looking statements on the basis of any subsequent developments, information or events.

(i) Details of significant changes in Key Financial Ratios:

There is no significant change in key financial ratios as compared to the ratios of previous financial year except following:

Particulars 2020-21 2019-20 Remarks
1) Debtors \ Turnover Ratio 4.64 6.66 The Debtors Turnover ratio has decreased due to more sales during last quarter of the year compared to last quarter in previous financial year.
2) Interest Coverage Ratio 4.68 2.80 The Interest Coverage Ratio has improved due to decline in interest cost during the year.
3) Operating Profit Margin Ratio 1.77 2.87 The operating profit margin has declined during the year due to increase in cost of raw material and other direct cost compared to previous year.
4) Return on Net worth 0.05 0.04 The Return on Net worth has increased during the year due to increase in Profitability of the Company.