Global Economic Scenario
Projections for the world economy is not highly encouraging in the
on-going financial year of FY 2023-24. The fallout of previous years impediments in the
form of coronavirus pandemic and disrupted world trade is likely to halt the global growth
rate significantly. For the entire coming decade, the World Bank has done the forecast of
global economic growth to shrink to 2.2% a year, and termed it as lost decade
The major forces that have shaped 2022 are still in continuation with
different intensities. By the various multi-lateral agencies, the reasons for potential
global slowdown cited are mostly related to demographic constitutions and prevailing
structural concerns. The commodity prices have been rising and the inflation levels have
kept steep. However, successive tightening of interest rate by all major central banks in
previous year has started showing the impact on global inflation indices, which are
steadily declining. As per reports (World Economic Outlook, April 2023) of International
Monetary Fund (IMF), the global headline inflation is set to fall from 8.7 % in 2022 to
7.0 % in 2023.
Overall the growth scenario of individual countries are likely to be
dependent largely on local policy environment, fiscal control and domestic consumption. It
is important to know that the major economies are likely to remain most affected while the
emerging economies are likely to continue doing pretty well on growth front.
Indias Macro-Economic Scenario
The World Bank reports that the Indias growth will continue to remain
resilient despite some signs of moderation in rate of growth. For the FY 23/24, it has
forecast of 6.3 percent (Indian Development Update, April 2023). This is in tune with the
GDP forecast by RBI, which has pegged it at 6.4% in next fiscal year.
However there are certain areas of potential concerns, including the
elevated inflation and subdued private consumption on domestic front. Internationally, the
rising commodity prices and geo-political tensions like Ukraine crisis may pose additional
challenges. Spillover from recent developments in US and European financial markets also
stand as a risk related to short-term investments inflows in all emerging markets,
including India. Despite all these, even WB notes that the Indian economy continues to
show strong resilience to external shocks
On similar lines the RBI in its State of Economy Report (March 2023)
states - "Unlike the global economy, India would not slow down. It would maintain the
pace of expansion achieved in 2022-23". Referring the NSO (National Statistics
Office) report, RBI cites that the India is intrinsically positioned better because of
demonstrated resilience and reliance on domestic drivers.
As per IMF, India will be fastest growing economy over next two years.
The IMF also highlights in its latest report that India and China alone will account for
about half of the global growth in current fiscal year. This is obvious that India is
placed in favorable part of the curve as far as the geo-economic fragmentation of global
growth is concerned. As the Indian market stays more lucrative in terms of returns in
comparison to the developed economies, there is high likelihood that the funds will keep
diverting to the industries in India.
Indian Infrastructure Sector
For the long-term growth perspective as well as short-term objective of
employment generation, the focus on Indian infrastructure sector is bound to continue for
many years to come. There is still an immense scope of development in multiple
infrastructure segments such as roads & highways, tourism, urban development, water
supply, ports, aviation etc. The sector attracts investments from the public and private
sectors, along with the FDI. For the policymakers, this remains the primary instrument to
trigger the multiplier effect for all other industries. Economic Survey (2023) tabled in
the parliament unequivocally states that India needs continued stepping up of infra
investment to sustain high growth rate.
Amrit Kaal; India@100: While presenting the Union Budget, the Honble
Finance Minister stated, "we are making azadi ka Amrit Mohotsav and we have entered
into Aamrit Kaal, the 25-year long leadup to India@100." Indias Century Study Report
(Dec 2022) presented by the Honble Prime Minister, states that India is at inflection
point as the country completes 75 years of independence, and looks forward to next 25
years. The vision document to make India $26 trillion economy identifies 10 key priorities
areas which include Infrastructure & Logistics, Emerging Energy, Healthcare, Water and
Education. These are the sectors that are also under the major focus of REPLs business
strategy.
National Infrastructure Pipeline (NIP): Around 8,964 projects with a
total investment of more than Rs. 108 lakh crores are at different stages of
implementation under the National Infrastructure Pipeline (NIP). In addition to boosting
the other industries and overall economy, these will create a number of employment avenues
at all levels. More importantly, these projects are massive in nature which will naturally
bring opportunities for all the stakeholders and companies involved on the projects. The
policy focus on infrastructure sector is correspondingly further extended in the Union
Budget 2023-24, tabled by the Honble Finance Minister.
Infrastructure focus of Union Budget: The most prominent aspect of
Union Budget 2023-24 was hike in capex for infrastructure by 35.4%. As compared to Rs.
7.5 lakh crores in previous year, the allocation has been raised to Rs. 10 lakh crores.
Additionally, fifty- year interest free loans to state governments is to continue for one
more year to spur investment in infrastructure. This outlay has been enhanced by Rs. 1.3
lakh crore. This is a huge allocation that has surpassed even the most optimistic
expectation of the industry. Apart from direct government expenditure, the policy is also
putting adequate emphasis on attracting private investment in the infrastructure. An
Infrastructure Finance Secretariat is to be constituted to facilitate the same.
It is more than obvious that the central government distinctly
identifies infrastructure sector as the primary growth driver and instrument for job
creation. Furthermore, Rs. 2 lakh crore credit guarantee scheme has been extended to
MSMEs. In context of our own organization, it assumes greater importance as REPL is
registered under MSME and our business domain is infrastructure consultancy
Multiple significant announcements have been made, touching all areas
of infrastructure development. Tourism is set to get an impetus by identification of 50
destinations to be selected for facelift, with airports and other ancillary attractions
for domestic and international travelers. A capital outlay of Rs. 2.4 lakh crores for
Railways is the highest ever budgetary allocation. This has to be spent on various
projects including 500 new Vande Bharat trains and the development of over 1275 stations.
Housing & Urban Development: The commitment of central government
towards Housing for All in urban areas is equally supported by the initiatives of the
state governments. Allocation to the government housing scheme PM Awas Yojana (PMAY) saw
an increase of 66% in budgetary outlay, to over Rs. 79,000 crores. The entire housing and
real estate sector assumes greater importance in the background of prevailing unemployment
concerns in the country. The sector is among the largest job creators especially at the
unskilled and semi-skilled levels. REPL is also working on PMAY projects in multiple
locations.
It is also noticeable that an Urban Infrastructure Development Fund
(UDIF) is to be set-up for public agencies to create infrastructure in Tier 2 & 3
cities. This will bring a huge business opportunity for the companies like REPL which has
credentials of operating in smaller towns beyond major metro locations. For us, a new
horizon will open for the services like Urban Planning, GIS and Water Supply consultancy.
Business Outlook for REPL & Future Plans
We have carefully analyzed the overall state of economy at global and
national levels, along with the industry scenario of the sectors where REPL operates. The
Indian economy is largely steady and well placed on path of growth recovery. Focus of
central & state governments on infrastructure, urban development and housing sectors
continues as reflected in successive annual-budgets and policy announcements.
Our company is well placed within an industry segment that offers
plenty of opportunities not only in the current financial year but also in the years ahead
during this decade. We have our business strategy aligned to overall direction of the
industry. Our involvement in on-going GoIs flagship programs such as PMAY, JJM, Smart
City Mission, AMRUT, Skill India, PMGSY etc. will continue to remain at the core.
Additionally, we will be actively looking to spread our consultancy portfolio in corporate
sector. In post-pandemic period, the Real Estate sector is also on fast recovery path and
we have focus on increasing our Project Management & Design assignments (Architecture,
Structural Engineering, MEP, BIM etc.).
Our current book order of Rs. 372+ crores give us the assurance of
steady work flow and revenue generation in the coming financial year. Moreover, the
acquisition on new projects is continuously adding further to our business volume.
While keeping the growth of our usual business intact, our efforts in
the direction of inorganic growth will continue. We are looking for the companies with
complementary business expertise where we can collaborate in suitable manner for
horizontal and vertical integration. We have already put a robust system in place for
business, finance, operation and regulatory due-diligence.
We are confident that these multi-pronged strategies will create a
multiplier effect on the top-line and bottom-line growth of REPL during FY 2023-24.
About REPL
From a very modest start in 1992 to the listing at NSE main
board in 2020, it has been a classic dream journey for us. The distinctive feature of our
company growth has been its alignment with the core development concerns of the country.
At every stage, we have made sure that our business operations and objectives create a
synergy with the fundamental priorities of the populace at large. Past three decades have
witnessed major macro-economic changes and frequent policy realignments in India as well
as at the global platform. The fact that we have been able to pull out the sustained
growth over such a long time span, is in itself a testimony of our robust business model
and internal strength. We are hardwired to sail through any upheaval in economic and
business environment. As the inception of our country was in the period of economic
liberalization and globalization in the country, we truly reflect the spirit of modern
India that has been shaping over these 30+ Years.
REPL has faced the heat of European Economic Recession and Dot Com
Bubble in 2000; then again in 2008 company sailed through global meltdown driven by US
Sub-prime Crisis. Every time we were able to keep our business intact and emerged at the
highher coordinates of growth curve. In 2016-17 massive changes were precipitated by the
GOIs decision of demonetization and introduction of GST regime; we again handled the
transition with great efficiency and consequently our growth rates were even higher than
previous years. The way we have handled the coronavirus pandemic and managed to restrict
the impact, reinforces the robustness of our business model and resilience of our
organizational character.
Today, we stand as team of 300+ professionals with
multidisciplinary experience and exposure. We have inhouse experts comprising of Fund
Managers, Architects, Urban Planners, GIS Experts, Infrastructure Specialist, Interior
Designers, Engineers and Project Managers. This enables REPL to deliver end-to-end
consultancy solutions in diverse sectors across Infrastructure and Urban
Development. Within the urban development segment REPL has designed and executed Hi-Tech
Cities, Integrated Townships, Group Housing projects, Commercial & Office Complexes,
Hospitality Projects (Hotels & Hospitals), Recreational Facilities (Sports Stadium
& Club Houses).
Within infrastructure sector, REPL has been working with central
government and multiple state government agencies. The variety of projects include-
preparation of regional & zonal plans, GIS based master plans, water supply systems,
sewerage system & waste water management, riverfront development, slum-free city plan
of action, city street vending plan, housing for all plan of action (HFAPoA), Roads &
Highways, Tourism Infra etc. Another flagship government program PMAY (Pradhan Mantri Awas
Yojna) has our extensive involvement covering 211 towns across 6 states.
REPL has been associated with Smart City mission of GOI since the very
initial stage, when the plan designed for the Bhopal Smart city was selected in
competition and included in the list of initial 20 cities. We have been providing
consultancy in conceptualization, planning and implementation of multiple smart cities -
Varanasi (UP), Indore (Madhya Pradesh), Kanpur (UP), Dehradun (Uttarakhand), Moradabad
(UP), Itanagar (Arunachal Pradesh), Jabalpur (Madhya Pradesh), Vellore (Tamil Nadu), and
Madurai (Tamil Nadu). On these projects, we have been working on ABD (Area Based
Development) as well as Pan City solutions. There is extensive applications of ICT on
various project components. We strive to design and build sustainable cities that are
right at the top of livability index. REPL has also parted with GOIs Skill India Mission
for technical training of youth in U.P. A fully quipped Training Center cum Hostelhas
been operational in Ghaziabad for this purpose.
REPL is an ISO 9001:2015 and ISO/IEC 27001:2013 certified organization
empaneled with more than 30 government department & agencies including UP RERA. The
Group has the privilege of serving a number of esteemed clients from Government, Public
and Private sectors. Pan India projects are handled from our branch offices located at New
Delhi, Noida & Lucknow; and project offices at Haldwani, Itanagar, Madurai, Manipur,
Chennai, Hyderabad, Mumbai, Samba, & Pune.
When we look ahead with higher growth aspirations for the company and
all our stakeholders and associates, we also find it opportune moment to be reminded of
the Shloka from Katha- Upanishad that teaches about the peaceful co-existence and
collective prosperity.
CONSOLIDATED FINANCIAL OVERVIEW
Rs. in lac
| Particulars (Rs. Lac) |
2022-23 |
| Total Revenue |
9223.43 |
| Total Expenses |
7617.34 |
| Profit before Tax & extraordinary items |
1616.09 |
| Extraordinary items |
- |
| Profit before Tax |
1616.09 |
| Tax Expenses |
413.86 |
| Profit after Tax for the year |
1202.23 |
The consolidated performance of the Company for the financial year
ended March 31st, 2023, is as follows:
• Total revenue from operations was at Rs.9223.43 Lac for the year
ended March 31st, 2023, as against Rs.8041.85 lac for the corresponding previous period, a
increase of 14.82% .
• Other expenses for the financial year ended March 31st, 2023
were Rs. 1428.69 Lacs as against Rs. 1456.18 Lacs for the corresponding previous period, a
decrease of 1.89%.
• The depreciation & amortization expenses for the financial
year ended March 31st, 2023 were Rs. 153.85 lacs as against Rs. 139.77 lacs for the
corresponding previous period, a increase of 10.07%.
• The profit after tax was Rs. 1616.09 lacs for the year ended
March 31st, 2023, as against Rs.1538.75 lacs for the corresponding previous period, an
increase of 5.03%.
• The EPS (Earning per share) for the financial year ended March
31st, 2023 was Rs. 6.93 for a face value of Rs 10 per share, as against Rs. 8.51 for the
corresponding previous period.
RESOURCES AND LIQUIDITY
• As on March 31st, 2023 the consolidated net worth stood at Rs.
10416.04 lac while there was a consolidated debt of Rs. 900.32 lac.
The cash and cash equivalents at the end of March 31st, 2023 were Rs.
63.66 lacs
INTERNAL CONTROL SYSTEM & ITS ADEQUACY
Far beyond the statutory requirements, the company puts special
emphasis on thelegal complianceandethical business practices, at the core of its
operations. We have comprehensive internal control systems put in place which does not
leave any room for deviation. This applies across Finance, Accounts, Administration, HR,
Technical divisions and corporate affairs. There are proper methods of checks and balances
to ensure adherence to all due processes.
The entire mechanism of internal control is guided and monitored by
Audit Committee and Board of Directors. It operates on independent, objective and
transparent basis, balancing risk management, controls and governance process. The
Internal Control system ensures compliance with all applicable Laws & regulations, Key
controls, significant business Challenges, Fraud Prevention and control. Our Internal
Control system facilitates optimum utilization of available resources to protect the
Interest of all Stakeholders.
There are set processes through which each transaction is duly
authorized, recorded and reported. Every Department has its SOP (Standard Operating
Procedure). There is well defined delegation of power with authority, limits for approving
revenue as well capital expenditure. Down to each business division, there is process laid
out for creating annual and long term business plans. These are reviewed periodically and
progress are evaluated.
The internal audit is carried out based on internal audit plan, which
is reviewed each year in consultation with the Statutory Auditors and the Audit Committee.
The internal audit process is designed to review the internal control checks in the system
and covers all significant areas of the Companys operations such as sales, purchases,
inventory, debtors, creditors, fixed assets and legal compliances.
RISKS AND CONCERNS
At broader level, the Company recognizes following risks to take into
account for business planning. :
Competition risk
For the individual components of our services (engineering,
architecture etc.), there are multiple small scale local players. They pose risk in terms
of cutting through the prices, owing to their small sett-up and hence lower overheads.
Company also faces risk from the large foreign players who are spreading their operations
out of traditional management & audit domain to technical & infrastructure
consultancy.
Rapid technological transitions
As core business strategy, REPL strives for applications of advanced
technological solutions in design, plan and execution. The increasing digitization
increases risk of data protection and security. Subsequently to cover the same, additional
layer of securities may impact in terms of cost escalation. It will require significant
capital investment towards new software applications and R&D, to stay competitive.
Economic risk
The REPLs business depends considerably on governments projects. The
allocation of budget on infrastructure projects directly corresponds to overall
macro-economic conditions and policies of government. Focus keeps shifting as per the
nation level and regional priorities. The business also depends of taxation norms. We have
defined conservative internal prudential norms. We ensure a favorable debt/equity ratio,
moderate liquidity, strong clientele with timely payment track record, and focus on select
projects to minimize the impact of adverse conditions.
Regulatory risk
Large infrastructure and construction projects are subject to clearance
from multiple authorities. These regulations are not uniform across s the country, as
there are regional compliances, subject to modifications time to time. Various approvals
are required in terms of licensing, registration and implementation. Additionally there
are other requirements from other authorities such as environmental clearance. These often
run the risk of cost and time overrun. However as the government is gradually moving
towards single-window clearance, these risks have lesser probability of any spillover.
OPPORTUNITIES
• Increasing focus on infrastructure spending towards governments
goal of dollar five trillion economy.
• Continuous increase in FDI in real estate and construction
industry
• Series of policies in terms of ease of doing business
• Leveraging our strength in new sectors such as tourism
infrastructure, roads & transport
• Companys relationship with the existing clientele, ensuring
stable book order
THREATS
• The contraction in global economy and hence Indian GDP growth
• Any second wave in pandemic surge, delaying project
implementation
• Entry of large international consultancy firms from other
domains may steep the competition for high value projects
• Dependency on few large scale projects
• Delayed recovery in construction sector may impact business
HUMAN RESOURCES
Human resource is key to our business. We have been continuously trying
to improvise on managing our human resource system as per the best benchmark in the
industry. The finalization of KRAs/KPS, and subsequently the appraisal & evaluations
are done in scientific manner. Special training programs are being run to enhance the
skill set as well as the leadership traits. The HR division works and helps the employees
in clear growth path and succession methods. Also at overall organizational levels the
skill-gap analysis is done on periodic basis to induct new talents with specific skills.
Training on new technology and software platforms is an important dimension of learning
environment within the company. Presently, the company consists of 300+ professionals
including the employees and the consultants on assignment basis.
During the previous financial year many progressive HR policies have
been introduced in the organization, along with the initiatives for the enhancement of
human resource development-
• Changes in Maternity Leave Policy
• Introduction of Paternity Leave and Referral Policy
• Conducted Executive Finance Training for Leadership team through
KPMG
• Introduced new PMS Policy and conducted trainings on the same
• Introduced Virtual joining, trainings and inductions in the
company
• Conducted Virtual Campus Drive for Graduate Trainee (GT) &
Management Trainee (MT)
• Recruitment module on HRMS in testing mode, currently done
manually
Annexture-4
CALCULATIONS AND EXPLANATIONS OF MAJOR RATIOS
| Sl No Ratios |
Numerator |
Denominator |
Mar-23 |
Mar-22 |
Change in ratio as compared to preceding
year |
Reason for change in ratio by more than 25% as compared to
preceding year |
| 1 Current Ratio (in times) |
Total Current Assets |
Total Current Liabilities |
2.6 : 1 |
2.82: 1 |
7.80% |
- |
| 2 Debt-Equity Ratio (in times) |
Debts Consists of long borrowings and lease liabilities (
except short term borrowing) |
Total Equity |
0.1 : 1 |
0.12 : 1 |
16.67% |
|
| 3 Debt Service Coverage Ratio (in times) |
Earning for Debt Service = Net Profit after taxes + Non-cash
operating expenses + Interest + other noncash adjustments |
Debt Service = Interest and lease payments + Principal
repayments |
10.51 : 1 |
28.73 : 1 |
63.41% |
Due to increase in Finance Cost during the year |
| 4 Return on Equity Ratio (%) |
Profit for the year less Preference dividend (if any) |
Average Total Equity |
11.85% |
14.52% |
-18.37% |
|
| 5 Trade Receivables Turnover Ratio (in times) |
Revenue from Operations |
Average Trade receivables |
1.2 : 1 |
1.55 : 1 |
22.18% |
|
| 6 Trade Payables Turnover Ratio (in times) |
Direct Operating Cost+Other expenses |
Average Trade Payables |
2.08 : 1 |
3.75 : 1 |
44.53% |
On account of increase in Trade payable |
| 7 Net Capital Turnover Ratio (in times) |
Revenue from operations |
Average Working Capital (i.e. Total current assets less Total
current liabilities) |
1.21 : 1 |
0.89 : 1 |
35.95% |
Average working capital deployed has increased. |
| 8 Net Profit Ratio (in %) |
Profit for the year |
Revenue from Operations |
13.78% |
17.23% |
-20.03% |
|
| 9 Return on Capital Employed (in %) |
Profit before tax and finance cost |
Capital employed = Net worth + Lease liabilities + Deferred
tax liabilities |
16.10% |
14.14% |
13.83% |
|
| 10 Return on Investment (in %) |
Income generated from invested funds |
Average invested funds in treasury investments |
N.A |
N.A |
|
|
+91-9892691696
