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Repro India Ltd Management Discussions

418.25
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Apr 2, 2025|12:00:00 AM

Repro India Ltd Share Price Management Discussions

Your Directors take pleasure in presenting the Management Discussion and Analysis Report for the year ended March 31, 2024.

1. BUSINESS OUTLOOK

THE DIGITAL FOCUS: REPRO FINDING SOLUTIONS TO MEET THE CHANGING CUSTOMER BEHAVIOUR

The retail industry has seen significant growth driven by the internet and e-commerce. Businesses now reach global customers quickly, facilitating crossborder transactions through their portals, websites and social media presence. Smartphones and online shopping convenience have spurred growth, with numerous options and competitive pricing driving demand for retail e-commerce.

Your Company leverages technology to bridge the gap between publishers and readers, focusing on online print-on-demand (POD) solutions to unlock global market potential. The entire e-commerce revolution and the online shopping growth has ensured that your Company strengthens its online solutions to meet changing consumer behaviour.

For publishers that have varied requirements and also an international presence, your Company offers an integrated publishing solution. Through this solution, where various requirements are addressed - the Publishers can increase not only their revenues but also their presence in the market. Your Company customises solutions that include long run offset, warehousing, short run import substitution and Print-on-Demand (POD), based on the publishers requirements.

Your Company launched its branded online bookstore, Bookscape, offering exclusive titles and a customised shopping experience through rich data analytics. Innovations in online offerings allow readers to order books anytime and anywhere. The operating model and supply chain have been optimised for efficiency to meet business objectives.

Your Company continues to strengthen its business model to meet the growing demand for online book purchases. Investments in professional talent, expansion of infrastructure, digital platforms, and technology ensure future growth as the trend towards online book buying continues.

2. BUSINESS OVERVIEW: A GROWING BOOK INDUSTRY - PROPELLED BY E-COMMERCE

INDIA: ADOPTION OF TECHNOLOGY LEADING TO RAPID GROWTH

Indias online book market is expanding due to societal, economic and digital reasons. India has a young vibrant population that is increasingly becoming literate and this young population adopts technology in their day-to-day life at an alarming speed. With a population of approximately 1.44 billion in 2024 and over 820 million internet users, India has a vast potential consumer base. The Internet penetration rate in India was 55% of the total population in early 2024. The young population drives rapid technology adoption, making India the largest connected nation.

Lifestyle changes and evolving consumer preferences have led to a surge in online purchasing. Many who once shopped in physical stores now prefer online platforms for their variety, convenience, and competitive pricing. These habits are reshaping consumer experiences and preferences.

The internet has transformed business operations, improving accessibility across regions and benefiting consumers. The online book market in India is poised for growth as more people turn to digital platforms for their purchases. This creates opportunities for publishers to reach a broader audience and provide a enriched online book-buying experience.

Businesses must adapt to the e-commerce market by establishing a strong online presence, leveraging technological advancements, and developing robust e-commerce platforms. The retail industry is undergoing a digital transformation, with a focus on enhancing global e-commerce presence to meet customer needs.

The digital revolution has created a thriving virtual marketplace. By embracing this transformation, companies can position themselves for growth and connect with a larger customer base in Indias expanding online marketplace.

THE BOOK INDUSTRY : A YOUNG TECH-ENABLED POPULATION FUELLING THE GROWTH

The global book market, valued at USD 132 billion in 2022, is growing rapidly

as part of the digital revolution. India, the worlds third-largest book market at USD 8.3 billion, is growing at a CAGR of 8.6%. While physical book purchases dominate, online sales are rising. However, Indias per capita book spend is USD 5, lower than the global average of USD 17.

Indias book market, compared to the USA and China, is underserved and holds great potential to keep growing. Key growth drivers include a young population that is keen to adopt the latest technology in day-to-day life, rising literacy, increased consumer spending, and growing readership in smaller towns. Affordable internet data and accessible international content further propel growth in both educational and retail segments.

As online book purchasing increases, Indias per capita spend on books is expected to rise. Readers seek the latest books delivered quickly and affordably. Your Company aims to unlock this potential by enabling publishers to tap into global and Indian markets through its tech platform, focusing on print-on- demand solutions to drive growth.

REPRO - CHANGING THE PARADIGM OF THE BOOK INDUSTRY

In adapting to the digital world, your Company has strengthened online initiatives to ensure global book availability. By helping publishers move online, your Company expands their market reach and enables them to meet customer demand for anytime access to titles.

Your Company addresses key challenges in traditional publishing, which is an unorganised Industry and has many limitations for the growth of many businesses. Some of these challenges are limited distribution reach due to physical constraints, high investments in the entire process, increasing costs of freight and warehousing, warehousing inefficiencies, high obsolescence rates, and cash flow issues from unsold stock. Added to all this would be the return of stock due to various factors as well as lost sales from the stock not being at the location at which the reader wishes to make the purchase.

To streamline the process as well as ensure publishers can growth their business, your Company has innovated a solution that meets and solves all these challenges. Investing in technology-driven solutions, your Company offers a seamless print-on- demand and distribution platform, disrupting traditional business models.

This specialised solution capitalises on the growing Indian book market, helping publishers leverage technology to reach larger audiences and achieve growth in the digital age.

REPROS: AN INNOVATIVE TECH-PLATFORM - REACHING READERS ANYTIME, ANYWHERE

Enabling publishers to overcome traditional challenges and access global markets, your Company provides a comprehensive tech platform for online book sales. Your Company has built many long-standing and deep relationships with publishers. Given the overall holistic and partnership approach to the business, Publishers supply their content to your Company. Your Company digitises and stores these titles in a digital warehouse.

By aggregating, digitising, and listing the publishers titles on online stores, your

Company ensures global reach. When a reader orders a book, the content is produced just-in-time and delivered anytime and anywhere in the world. The one-book factory allows for on-demand production and quick delivery. Additionally, the platform manages distribution, royalty collection, and payment to publishers.

Your Company has innovated an integrated solution for Publishers. This solution customises the requirements of the publishers across various types of requirements so that the publisher can ensure his title reaches his readers anywhere in the world.

Typically a Publisher would have tie-ups with printers across the country for their large volume offset print business. This inventory would be stocked at the warehouses of their distributors who are doing business in the conventional manner. If required, the inventory would be given to e-retailers across the country. An overall extended cycle time would lead to tremendous loss in efficiently capturing potential demand. And hence to manage this supply chain, publishers would need to overstock huge amounts to inventory. This aging of inventory would lead to an overall delayed cashflow cycle.

To overcome all these challenges, your Company would consolidate the long run offset printing and offer warehousing services for titles printed by Repro. Smart seller flex warehouse facilities which allow inventory lying in warehouses to be used as live inventory on e-Retailer channels would also be used. This would lead to rapid sales and the Publishers can start generating revenue for titles within 12 hours of printing the books as opposed to having to wait for 30-45 days in the current supply chain.

Your Company also offers publishers the opportunity to make more international titles available in India, without having to forecast inventory for 6-9 months and then import the books into India from abroad. This also enables the Publishers to increase revenues and save costs by making more international titles live in India and also reduce inventory holding from 6 months to a few weeks. For titles where the publisher is unable to forecast demand, can have the flexibility to move the entire International and local list to Print on Demand (POD) with Repro.

Your Company launched Bookscapes, an online site offering exclusive titles with features like a special brand store, rich data analytics, original books, enhanced user experience, and free, fast delivery. Partnerships with e-retailers like Amazon,

Flipkart, Jio, e-Bay, and FirstCry ensure widespread availability of books.

A contractual arrangement with Ingram Content Group expands access to global books for Indian readers and makes Indian publishers content available globally. These strategic collaborations facilitate seamless book distribution, connecting publishers with readers worldwide.

STATE-OF-THE-ART-TECHNOLOGY - INNOVATING FOR A SEAMLESS BUSINESS MODEL

A robust infrastructural framework driven by technology enables growth, ensuring time and cost benefits for readers and publishers. Recognising this, your Company has invested in technology for data aggregation and dissemination, providing analytics, predictive sales forecasting, and automated pricing interventions.

The tech platform ensures a seamless flow of information and titles from publishers to readers worldwide. Publishers gain access to a digital storefront for placing repeat orders for books and e-books, which are automatically scheduled for production, minimising turnaround time and enhancing customer satisfaction.

Your Company has established state-of-the-art facilities tailored to various market needs. A facility for the e-retail segment features sophisticated machines for printing, binding, collating, and dispatching the required quantities. The brownfield expansion of Print on Demand capacities has increased production capacity by 20%.

An additional facility in an SEZ offers publishers optimal pricing and fast time-to- market benefits, further enhancing their pricing strategies.

3. ACHIEVEMENTS, CERTIFICATIONS, AND AWARDS

CERTIFICATIONS:

• ISO 9001:2015 (Lower Parel - Bhiwandi - Surat - Rewari)

Successfully completed Surveillance audit without any non-conformities. This Certificate covers all our three sites including the Head Office.

• ISO 14001:2015

Successfully completed the Recertification Audit by Intertek India without any non-conformities.

• FSC (Forest Stewardship Council) Chain of Custody Certification (CoC)

FSC CoC Certification completed Surveillance Audit of all our plants including our Corporate Office without any non-conformity. This certification focuses on

Green Initiative and sustainable use of forest products.

Your Company being part of Print industry, consumes lot of paper most which comes from cellulose fibres of bamboo and some of the soft wood trees like pine and fir and some hardwood trees such as eucalyptus. A single tree may produce 16 reams of paper and to produce one ton of paper, around 17-24 trees are required.

FSC? Certified paper is produced considering sustainable forest management and resources. Your Company is promoting the use of FSC?

CoC certified paper to its publishers. Publishers like EZ Vidya, OUP, Penguin and others have already started using FSC? certified paper.

• ISO 27001:2013

Successfully completed the Surveillance Audit of the Information Security Management System (ISMS) without any non-conformity.

• SOCIAL COMPLIANCE AUDITS

Our two facilities are assessed on the basis of SMETA (SEDEX Members

Ethical Trade Audit) namely Surat and Rewari and meeting the performance on following parameters.

1. Labour

2. Wages and Hours

3. Health & Safety

4. Management System

5. Environment

• We were also audited by Intertek (Surat) and Bureau Veritas (Rewari).

Our Rewari Facility is now FAMA certified facility for Disney Products.

CELEBRATION OF PRINTERS QUALITY WEEK:

• We express our gratitude towards the father of printing, Johannes Gutenberg, on 24th February each year, which is celebrated as Printers Day worldwide to commemorate the birth anniversary of Johannes Gutenberg.

• As part of the celebration, we invited our suppliers to train our employees

on various technical know-how about raw materials, machine safety and operations.

CELEBRATION OF SAFETY WEEK:

• We celebrated Safety Week across all our locations from 4th March to 10th March 2024. Various programmes were conducted during the week such as Poster Competition on Safety, Essay Writing and Slogan Competition.

• Mock Drill and special training sessions on Health and safety, general safety and road safety.

AWARDS AND RECOGNITION:

QCFI Mumbai Chapter Convention on Quality Concepts (CCQC)

Your Company four teams participated in Quality Circle Forum of Indias Mumbai Chapters Annual convention in Mumbai and won four Gold Trophies. Four case studies which were presented was:

a) Energy Conservation

b) Change over time reduction on Hunkeler Machine

c) Reduction in Packing cost

d) Improvement in Binding department Print Week Award

Your Company participated in Print Week Award in three categories as follows.

a) Green Printing Company of the year

b) Book Printer of the Year (Print-on-Demand - POD)

c) Digital Printer of the year

4. OPPORTUNITIES AND THREATS Your Company is innovating to meet the Publishers requirements to reach their reader anytime and anywhere in the world. The trend of purchasing books online offers a vast market for expansion. The digital revolution has removed geographical boundaries, enabling global reach and diverse readership. Continuous technological innovation provides opportunities to enhance operations and customer experience. By staying updated with publishing trends and evolving customer needs, your Company can capitalise on new opportunities and maintain a competitive edge.

However, the competitive e-retail space poses challenges. Innovation of product and process is required to maintain the cutting edge solutions which enhance the customer experience as well as increase business scope for all the stakeholders. Your Company must maintain its advantage through innovation, differentiation, and adapting to emerging technologies. A proactive, agile approach is essential to staying ahead in the market.

5. RISKS AND RISK MITIGATION

Your Company faces typical business risks such as raw material price fluctuations, foreign exchange changes, interest rates, political instability, government policies, competition, and technological obsolescence. Strategies to minimize these risks include:

• Investing in a new online model to transition into the digital space.

• Constant market innovation to build new platforms and reach new markets.

• Building partnerships with leading organisations for growth.

• Employee training and development programs for effective risk

management.

• Focusing on business predictability and planning.

• Continuous innovation in products, technology, and processes.

• Strategic investments in technology to enhance efficiency.

• Reducing wastage through customised IT systems.

• Negotiating input costs to benefit customers.

These strategies aim to proactively manage risks, ensuring long-term sustainability and growth.

6. FUTURE STRATEGY AND VISION FOR MARKETING AND SALES

Your Companys future strategy focuses on unlocking the potential of the

books-on-demand industry and expanding globally. Positioning as a gateway for publishers worldwide, your Company aims to efficiently produce and deliver books, allowing publishers to grow their businesses.

The Company is committed to making books available anytime and anywhere, contributing to literacy and educational content availability. The vision includes partnering with publishers to explore growth opportunities through technology platforms, enabling them to reach new readers and expand market presence cost-effectively.

Your Company has a diversified and customised product mix in digital business ranging from import substitution offerings for specialised international publishers; Print on demand (POD) offerings for publishers, multiple e-distribution channels offerings for new age YouTube educators & influencers, top academic and Fiction/Non-fiction/Self-Help publishers. Several teams offer the personalisation and customisation for each of these segments and solutions are created for each customer for their long-term holistic requirements.

Expanding sales teams across different segments aims to penetrate regional markets in India and capture international opportunities, driving growth in the global and Indian book publishing markets.

7. INTERNAL FINANCIAL CONTROLS

Your Company has implemented adequate internal financial controls, managed by qualified personnel. Policies and procedures ensure orderly business conduct, asset safeguarding, fraud prevention, accuracy of accounting records, and timely financial disclosures. Internal audits review and strengthen these controls.

8. HUMAN RESOURCES MANAGEMENT

The Human Resources Management (HRM) function has transitioned to effectively manage change and collaborate with stakeholders to drive excellence. During the pandemic, HRM provided guidance for organisational and personal safety. HRM now plays a crucial role in business decisions, focusing on work culture, employee engagement, productivity, and efficiency.

Your Company initiated actions to keep the workforce engaged and continuously seeks growth opportunities for employees. A diverse workforce enhances collective understanding and promotes a collaborative environment for ongoing development.

9. DISCUSSION ON FINANCIAL PERFORMANCE

(CONSOLIDATED) WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year, your Company has focussed on the strategic objective of investing in the new digital initiative. These expenses have been charged to Profit and Loss Account, although the segments are not fully commercially operational. Your Company has balanced it with a focus on decreasing debt through collections and mitigating potential risks in financial terms.

REVENUE

Sales/Income from operation increased by 14% from Rs. 48,161 lakhs in 2023 to Rs. 42,292 lakhs in 2024.

Cost of Materials

Cost of material was at R 22,643 lakhs in 2023 as against f 26,543 lakhs in 2024. Cost of material as a percentage to sales has increased to 55% in 2024 from 54% in 2023.

Employee Emoluments

Salaries, wages and other employees benefits were Rs. 4,030 lakhs in 2024 as against Rs. 3,797 lakhs in 2023. As a percentage of sales, it has decreased to 9% in 2024 from 8% in 2023.

Operating and Other Expenses

Operating and other expenses amounted to Rs. 12,201 lakhs in 2024 as against Rs. 1 1,385 lakhs in 2023. The expenses as a percentage to sales has decreased from 27% in 2023 to 25% in 2024.

Operating Profit (PBDIT)

PBDIT has increased to 11% of sales in 2024 as against 10% of sales in 2023. Interest and Finance Charges

The financial expenses has decreased to Rs 973 lakhs in 2024 from Rs 1,131 lakhs in 2023. Depreciation

The depreciation charged to revenue has decreased to Rs. 2,967 lakhs in 2024 as against Rs. 2,471 lakhs in 2023.

Profit before Tax (PBT)

Your Company has made a Profit before Tax of Rs. 1,447 lakhs for the year 2023-24 as against the previous years Profit before Tax of Rs. (865) lakhs.

Profit after Tax (PAT)

Your Company has made a Profit after Tax of Rs 1,210 lakhs for the year 2023-24 as against the previous years Profit after Tax of Rs. 873 lakhs.

Sr. No. Key Financial Ratio

Financial

Year

2023-24

Financial

Year

2022-23

% Change in Key Financial Ratios Explanation

1 Debtor Turnover Ratio

6.47 6.41 1% Increase in Sales and improved realisation

2 Inventory Turnover Ratio

5.11 4.72 8% Decrease in inventories

3 Interest Coverage Ratio

5.54 3.95 24% Increase due to increase in profitability during the year

4 Current Ratio

1.87 1.52 5% Improvement due to decrease in Bank borrowings, creditors and current liability

5 Debt Equity Ratio

0.07 0.22 (68%) Decline due to higher repayment of borrowings

6 Operating Profit Margin

12.34 6.41 90% Better profitability during current year

7 Net Profit Margin

3 2 50% Better profitability during current year

8 Return on Net worth

6.30 5.47 15% Increase due to increase in profitability during the year

11. CHANGE IN RETURN ON NET WORTH

The return of Net Worth for the financial year 2023-24 has increased by 15% on account of profit during the year.

CAUTIONARY STATEMENT

Statements in the management discussion and analysis report describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations and futuristic in nature. Actual performance may differ materially from those either expressed or implied. Such statements represent intentions of the management and the efforts put into to realise certain goals. The success in realising these depends on various factors both internal and external. Investors, therefore, are requested to make their own independent judgements.

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