sueryaa knitwear ltd share price Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

We submit herewith the "Management Discussion and Analysis Report" on the business of the Company as applicable to the extent relevant.

GLOBAL ECONOMY OVERVIEW:

The textile market consists of sales of textiles by entities (organizations, sole traders and partnerships) that produce fiber, yarn, threads, carpets, rugs, linens and other textile products.

The main types of textile are other textile product mills, fabrics, yarn, fiber and thread, home furnishings and floor coverings, textile and fabric finishing and fabric coating mills. Household furniture refers to all mobile, compactable goods or machinery used to furnish a home, such as chairs, tables, sofas, mattresses, and so on. The different materials include cotton, jute, silk, synthetics, wool and involves various process such as woven, non-woven.

The global textile market size is expected to grow from $530.97 billion in 2021 to $575.06 billion in 2022 at a compound annual growth rate (CAGR) of 8.3%. The textile market is expected to grow to $760.21 billion in 2026 at a CAGR of 7.2%.

Increasing demand for online shopping is expected to drive the textile manufacturing market. Manufacturers can now sell their products on a larger platform than before, which will increase their customer base geographically driving the growth of the textile manufacturing market. In countries such as India, for instance, e-commerce portals have boosted the sales of traditional garments by giving larger exposure to producers who were confined to one geography.

INDIAN ECONOMY OVERVIEW:

India has emerged as the worlds fastest-growing major economy, and it is predicted to be one of the top economic powers in the next decade, owing to its robust democracy and strong partnerships. The export demand in India is mainly driven by the US, the largest market, accounting for 60 per cent of Indias home textile exports. Compared to a 9 per cent increase in Indias home textile product export of US $ 5.7 billion in FY 2021, exports to the US increased by 14 per cent, while exports to the other major markets of the UK and the EU reported a year-on-year decline during the year.

On the other hand, despite the duty disadvantage of 9 to 10 per cent, Indias towel export to US is around 20 per cent of Europes total towel sourcing.

In the Western world, terry towels generate majority of sales in the towel segment. Even in India, the largest global suppliers from the country are now looking aggressively at domestic branded terry towel market. The high growth potential with good margins is the attraction.

INDUSTRY STRUCTURE AND DEVELOPMENT

Indias textile sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to Indias exports. The textile industry is also labor intensive and is one of the largest employer. The textile industry has two broad segments. First, the unorganized sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organized sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale. India accounts for good percentage of the worlds production of textile fiber & yarns. Fabric production in the country rose to millions. The industry is the second largest employer after agriculture, providing employment to over millions of people directly and indirectly. The Indian Textile Industry contributes a good percentage to Indias Gross Domestic Product (GDP), and overall Index of Industrial Production (IIP).

The Indian Textiles Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textiles industry also plays a vital role through its contribution to industrial output, employment generation, and the export earnings of the Country.

Industry Overview

OPPORTUNITIES, CHALLENGES AND OUTLOOK

Opportunities

The most significant change in the Indian textile industry has been the advent of man-made fibers (MMF). India has successfully placed its innovative range of MMF textiles in almost all the countries across the globe. The future outlook for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade.

Opportunities available to the Company in the present scenario, which can be seized for the benefit of the Company and ultimately to the stakeholders, can be summarized as under:

1. The government had extended the duty drawback facility on all textile products & increased the rates in some cases to boost exports in the sector.

2. In the Union budget, a good amount has been allocated to the Ministry of Textiles in order to support various schemes covering the textile industry.

3. Capacity built over years has led to low cost of production per unit in Indias textile industry; this has lent a strong competitive advantage to the countrys textile exporters relative to key global peers.

4. Indias growing population has been a key driver of textile consumption growth in the country.

5. The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand

6. Urbanization is expected to support higher growth due to change in fashion & trends.

Threats

Based on review of the textile market situation and level of rivalry present in the domestic market, following threats might be present in the market, which can hinder growth of the revenue of the Company:

1. Intense competition between established brands and private label brands.

2. Low cost substitute products from other countries

3. Significant presence of small suppliers has reduced the bargaining power.

4. Major clothing brands have better bargaining power over textile manufacturers, as the product differentiation is low and numbers of players are high and fragmented.

DISSCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable accounting standards issued by the Institute of Chartered Accountants of India. The details of the financial performance of the Company are appearing in the Balance Sheet, Profit & Loss Accounts and other financial statements forming part of this annual report.

INTERNAL FINANCIAL CONTROL SYSTEM

Given the magnitude and nature of its business, the Company has maintained sound and commercial practice with an effective internal control system. The system ensures that all transactions are authorized, recorded and reported correctly to safeguard the assets of the Company and protect them from any loss due to unauthorized use or disposition. The adequate internal information system is in place to ensure proper information flow for the decisionmaking process. The Company also has well-established processes and clearly defined roles and responsibilities for people at various levels. The control mechanism also involves well documented policies, authorization guidelines commensurate with the level of responsibility and standard operating procedures specific to the respective businesses, adherence to which is strictly ensured. Internal audit is carried out frequently to create awareness and to take corrective actions on the respective units or areas, which need rectification. These reports are then reviewed by the "Management Team" and the "Audit Committee" for follow-up action.

HUMAN RESOURCE DEVELOPMENT

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation.

Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.

DISCLOSURE OF ACCOUNTING TREATMENT

While preparation of financial statements, a relevant Accounting Standard treatment has been followed.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report containing your Companys objectives, projections, estimates and expectation may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors.

	By order of the Board of Directors
	For Sueryaa Knitwear Limited
Date: 25.07.2023	Bhanu Gupta
Place:Ludhiana	Whole time Director
	DIN-09688120