Shubham Polyspin Management Discussions


This section contains certain forward-looking statements which are based on certain assumptions and expectations of certain future events.

Overall Review

The Company is engaged mainly in the manufacture of all kind of PP Multifilament Yarn/Fabrics. The factory situated at Block No. 748, Saket Industrial Estate, Nr. Kaneria Oil Mill, Jetpura- Basantpura Road, Borisana, Tal-Kadi Dist: Mehsana-382728. The Company also manufacture on Job Work basis and get their products manufactured on Job Work basis.

In the year 2013, promoters of the Company zeroed on Spin Draw Wind Line Machinery from Lohia Corp having monthly capacity of 50 MT. Spin-Draw-Wind Lines for polypropylene multifilament yarn offer compact and flexible solutions for varied applications. The machine is capable of producing medium to high tenacity air intermingled yarns for sewing threads, webbings & slings, braids & ropes and a variety of technical textiles. Moreover, the company had taken premises admeasuring approx 4800 Square feet area at Block no. 95/3, Shed No. C2 & C3, Trimul Industrial Estate, Vadsar Village, Gandhinagar, on rental basis. Further the company had arranged project term loan sanctioned from Bank for purchasing and installing Spin Draw Wind Line Machine. The products of the company were well received in export markets. Currently the total combined capacity of the company is 250 MT/per month with effective production capacity of 200 MT/per month

With a monthly production capacity of 200 MT, the Company has been focusing to increase production of value added products in the overall production.

Industry Structure and developments

Technical textiles are an important part of the textile industry and its potential is still largely untapped in India. With the increase in disposable income, the consumption of technical textiles is expected to increase. Thriving on end user segment growth and domestic consumption, the Indian technical Textiles market has reached INR 1,16,000 crore by 2016-17 at a year-on-year growth rate of 12% p.a Major Schemes being implemented for technical textiles by Ministry of textiles, government of India.

Financial Performance with respect to Operational Performance

The Company is engaged in the manufacture of all kind of PP Multifilament Yarn/Fabrics. It has reported net profit margins of between 1% to 5% in the last five years. In future, the Company expects the revenue growth to be around 3% to 5% in the next couple of years.

Financial Performance:

(Rs. In Lakhs)

Particulars Current Year Previous Year
Ended 31.03.2023 Ended 31.03.2022
Revenue from Operations (Gross) 4460.92 5291.25
Add: Other Operating Income - -
Less: Total Expenditure 4332.61 5176.72
Profit before other income, interest, depreciation & tax 128.31 114.53
Add: Other Income 231.79 213.42
Profit before Interest Depreciation & Tax [PBIDT] 360.10 327.95
Add: Interest Income - -
Earnings before Interest, Tax and Depreciation (EBITDA) 360.10 327.95
Less: Interest Expense 115.58 110.40
Less: Depreciation 129.94 92.55
Profit before tax 114.58 125.00
Less: Tax Expenses 31.19 57.46
Profit for the year 83.39 67.54

Details of significant changes in key financial ratios are as given below:

Sr.No. PARTICULARS UOM F.Y.2021-22 F.Y.2022-23 GrowthYOY
1 Revenue Growth % 37.36% (15.69%)
2 EBITDA Lakhs 327.95 360.10 9.80%
3 EBITDA Margin % 6.20% 8.07% 1.87%
4 PBT Lakhs 125.00 114.58 (8.34%)
5 PAT Lakhs 67.54 83.39 23.47%
6 Net Worth Lakhs 1363.35 1446.74 6.12%
7 ROE % % 5% 6% 16.84%
8 Net Debt Lakhs 1308.07 1043.82 (20.20%)
9 Debt Weight 0.96 0.72 (24.80%)
Equity 1.00 1.00 -
10 Working Capital Ratio Times 0.99 1.25 25.52%
11 Fixed Assets Turnover Ratio Times 3.59 3.00 (16.43%)
12 Debt Service Coverage Ratio Times 1.34 1.36 1.50%
13 Inventory Turnover Ratio Times 26.37 20.23 (23.26%)
14 Debtors Turnover Ratio Times 7.34 6.29 (14.26%)
15 Interest Coverage Ratio Times 2.13 3.12 46.48%

The turnover of the Company decrease in the financial year 2022-23 compare to previous year due to general business slowdown in comparison to the previous year. However, the profitability of the Company increased due to business efficiencies. The Company has been successful in achieving operational efficiency in working capital and also Interest coverage.

Internal Control Systems and their adequacy

The Company practices an internal control system which ensures proper handling and management of its assets. The internal control system of the Company is geared towards achieving efficiency in operations, effective monitoring and compliances with all applicable laws and regulations. The Company regularly conducts internal audit programs. The internal control department of the Company functions under the guidelines of the Audit Committee of the Company.

The Company regularly reviews the adequacy and effectiveness of the internal control system and suggests improvement for strengthening them.

Opportunities and threats

Our Company and factory is situated at well-developed industrial area, with all the infrastructure facilities and both skilled and unskilled manpower are available at competitive cost. Moreover, our factory location is having easy access to National and a state highway as a result transportation of goods we manufacture and procure becomes hassle free. At present, our company is having manufacturing of Polypropylene (PP) Multifilament yarn upto 200 MT/per month and we have reach to this level within a short span of 5-6 years.

Our company constantly endeavors to improve our production process, skill up gradation of workers, modernization of plant and machineries to optimize the utilization of resources. We regularly analyse our material procurement policy and manufacturing process to de bottle neck the grey areas and take corrective measures for smooth and efficient working thereby putting resources to optimal use.

Material Developments in Human Resources and Industrial Relations Front:

Our promoters have been actively involved in the business from continues personal attention. Further, our promoter Directors has adequate and rich experience in our business. The team comprises of personnel having operational and business development experience. We believe that our management experience and their understanding of our industry will enable us to continue to take advantage of both current and future market opportunities. Our Company is having a number of experienced staff. There is a good communication system between all the levels of management level i.e. from top level management to bottom level. Our managements experience and knowledge enable us in addressing and mitigating various risks inherent in our business, including competition, the global economic crisis related effects and fluctuations in the prices.

Outlook

The outlook for Indian economy for the year 2022-23 need to be assessed in the light of emerging global and domestic developments due to geo-political tensions and recessionary trend in developed nations. Indications are that global economic growth is expected to pick up slightly. This can be expected to provide boost to Indias exports. On the other hand, the increasing global prices of oil and other key commodities may exert an upward pressure on the value of imports. In line with the projections for strengthening of Indias growth by multi-lateral institutions, the nominal growth of the economy is expected to be 6- 8 per cent in the financial year 2022-23.

Risks and Concerns

The Company regularly insures all its assets to enable itself in case of any mishappening. The Company has framed a risk management division which constantly monitors the Indian and international markets and guides the management of any sort of prevailing risk to the Company. However, the COVID-19 was an unprecedented phenomenon and as the pandemic has not been eradicated completely, the situation, though stabilizing, it is not out of danger completely and it is cautious time for the Company as well as for the industry.

Environment and Safety:

The Company is committed to comply with the statutory requirements related to environment, health, safety and to prevent pollution through continuous improvement in processes, practices and EHS awareness. Your Company not only cares for compliances is this aspect but also contributes towards society health, safety and green environment.

Material Developments in Human Resources and Industrial Relations Front, including number of people employed

Human resource is an asset to any industry. The Company believe that their employees are the key to the success of their business. They focus on hiring and retaining employees and workers who have prior experience in the Plastic Industry. Their manpower is a prudent mix of experienced and young personnel which gives the dual advantage of stability and growth. Companys work processes and skilled resources together with their strong management team have enabled them to successfully implement growth plans. As on 31st March, 2021, the Company has the total strength of 51 Employees excluding Contract Labours in various departments.

Cautionary Statement:

Statement in this Management Discussion and Analysis Report, describing the Companys objectives, estimates and expectations may constitute ‘Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.

For and on behalf of Board
sd/- Ankit Anil Somani
Place : Borisana (DIN: 05211800)
Date : 30th May, 2023 Chairperson & Managing Director