GLOBAL ECONOMY & OUTLOOK
Under the effects of the Russia-Ukraine crisis and the looming US-China turmoil, the
global financial economy is floating in a period of uncertainty and tension. Countries are
on a rocky road to recovery amidst the ongoing tussles troubling the economys
performance.
Inflation levels on a sky-high and tight monetary policies paint a scenario of
restricted growth. Noting these factors, the baseline real GDP growth rate was expected to
fall from 3.4% in 2022 to 2.8% in 2023. Its expected that advanced economies will face a
profound impact from the economic downturn.
However, its not all gloomy. With the rapid infrastructure developments and falling
inequality index, consumer demand is expected to shoot up and carry the economy on an
up-trend. Reports project the GDP growth to settle at 3% in 2024, commencing on a new
recovery path.
The current economic scenario points toward an era of subdued, yet subpar growth
levels. Faced with several limitations, the economy is holding up strong and showing high
signs of resilience.
The upcoming years will be held by emerging economies. Data points from developing
countries point toward strong service sector development, improving the relative market
situation. Consumer spending and industrial investments are expected to be on the rise,
leading to a moderation in the overall economic conditions.
Looking 10 years ahead, the global economy is showing an opportunistic blend of
disruptions and possibilities. Impacts from the macroeconomic shocks will fade out in the
face of the growing consumer and investor confidence index. Most indicators point toward
financial market stability, with emerging markets making greater contributions to economic
developments.
(Source: High Inflation: Impact and the Policy Response - Explained, pointwise-ForumlAS
Blog)
INDIAN ECONOMY & OUTLOOK
Suumayas dawn into the new phase is facing directly into Indias development and
journey to be a superpower. Our services and industrial impacts are targeted to fill the
gaps and power macro-level growth in the economy.
Across sectors, the Indian economy is growing stronger than ever. The agricultural
sector, the hub of our nation, is set to witness rapid developments driven by advanced
technology Suumaya has already set out plans to contribute to this development with
digital innovations and a robust distribution network across the agro-value chain.
With a 4% share in the global trade in the textile industry, India stands as the 2nd
largest garment producer. Moreover, cotton production is expected to reach 7.2 million
tonnes by 2030. We intend to play a significant part in developing this industry with a
mix of our retail stores and B2B textile trade network.
Indias trade regime also seems to be on a rising stage. Both imports and exports are
expected to grow at 10% and 14% CAGR respectively. In light of this, Suumaya is rapidly
growing its B2B trade arm, promoting global trade.
Contributing to the growth of the economy from every end, Suumaya has charted out a
holistic action plan to accelerate Indias journey to become a superpower by 2030. We are
undertaking initiatives to ensure that this development journey is sustainable and
organically sufficient.
(Source: Textile Industry in India, Leading Yarn Manufacturers in India - IBEF)
INDUSTRY OVERVIEW
Suumayas growth avenues are synonymous with that of India. Weve contributed to and
catalyzed the developing trends in the agriculture, textiles, retail, and trade industries
across the nation.
POLYMERS
Economic Overview
Polymers and PVCs play a major role in Indias vibrant, $190 billion petrochemicals
industry. Owed to its wide-ranging use cases, the products generate extensive demand from
manufacturers, retailers, and even end-consumers. Moreover, polymers and PVC are seen as
sustainable and eco-friendly substitutes for other materials like wood, paper, metal and
others.
With the growing population, robust economic developments, and macro fundamentals,
India is expected to contribute 10% to the global demand growth in the petrochemical
industry. Currently, the nation ranks 3rd in polymer consumption. In 2022, India witnessed
a massive polymer production volume of 12.47 million metric tonnes.
Polymers, along with other popular petrochemical products, see a never-ending use
across healthcare, housing, cleaning, construction and more. The rapid industrialization,
demographic conditions, and stress on environmental sustainability are propelling the
petrochemical and polymers industry throughout the nation.
The Government of India has launched several PLI schemes and initiatives to support the
production and distribution of polymers and other petrochemicals, laying the foundation
for sustainable economic growth.
The widespread demand and expansion calls for an extensive supply chain network that
connects industrial manufacturers with retailers and users. In line with this, we are
witnessing rapid developments in the industrys supply chain, creating a seamless
ecosystem between the raw material manufacturers, exporters and end-consumers.
From a business perspective, the petrochemical industry has massive potential for
expansion and advancement, particularly in its distribution and supply chain network.
(Source: India will contribute 10% of incremental global petchem demand growth: Puri
(business- standard.com)
Suumayas Vision
We plan to expand our region of business across India.
While we currently deal mostly with the western and north-western arm of the nations,
Suumaya has charted out expansion plans to conquer the east and southeast regions over the
coming years.
With the growing importance of innovative raw materials and products, Suumaya also has
plans to diversify its product portfolio with emerging resourceful materials. The idea is
to increase the accessibility to quality raw materials, inducing a culture of innovation,
thereby empowering the "Make in India" initiative.
Opportunities & Threats
Opportunities
New Products can be added
The market of polymers and PVC including that of raw materials is very extensive and
vast. New products can be added to the existing products to capture wider markets.
New regions can be explored
With growing demand, new regions and areas can be explored for supply chain of these
products
Change in Consumer behaviour
Change in consumer behaviour leads to more innovation and more demand for products in
the market
Threats
Market Competition
There are various market players which causes tremendous competition in the field thus
giving a strong market competition.
Price Fluctuation
Fluctuation of prices in the industry can lead to losses.
Risk and Risk Mitigation
Risk
- Unstructured process workflow can affect productivity
- Low demand of particular products in off seasons
- Change in government laws and policies
- Increasing competition with over market vendors
- Employee poaching and low retention rates
Mitigating the Risks
- Diversifying product range and strategizing procurement according to the seasons
- Multiple brands from different countries are imported to navigate laws
- Focused team providing quality service & products to establish strong brand
rapport
- Enhancing work environment with regular counseling and skip-level meetings
AGRICULTURE
Economic Overview
Indias agriculture sector is at a crucial point. 75 years ago, the sector was the
primary driver of our economy, contributing to more than half of its GDP. Today, 55% of
the Indian population is dependent on the agriculture sector as their primary source of
livelihood. Clearly, then, agriculture holds a special place in the Indian economy in more
than one way.
Hosting the largest fertile land to plant crops like wheat and rice, India has
positioned itself as the land of diverse herbs and spices. It is also the largest producer
of milk, pulses, and spices. In 2022, India was responsible for 50% of the worlds rice
market.
The industry has reached a massive size of INR 80,550 billion and is expected to grow
at an impressive CAGR of 12% by 2028.
There are several factors catalysing this rapid development:
- Fruitful weather conditions and a diverse seasonal landscape that welcomes a wide
variety of crops.
- Highly cultivable land provides ideal conditions for farming and irrigation.
- Investments in technological advancements to improve the produce quality and
processing speed across the sector.
- A growth in urbanization and disposable incomes pulling up the produce demand
- A bounce back in consumer spending by 6.6%
Particularly, the government and investors are showing increasing interest towards the
adoption of AgTech and modern trade policies. The new technologies and the advent of
AgTech have become crucial to facilitate growth in the sector. From enhancing farmers
lives to increasing operational effectiveness, AgTech will remain a key focus to foster
sustainable development.
In support of sector modernization, the Indian Government has launched the Digital
Agriculture Mission for 2021-25, aiming for widespread digital transformation across
agricultural practices. A report from McKinsey suggests that the AgTech ecosystem can
potentially increase the average farmers income by 25-35%.
Looking ahead, Indias agricultural sector is in the wake of a sustainable
transformation journey. The increasing investments in infrastructure, government support,
and technological developments are expected to generate great momentum in the near future.
Suumayas Vision
Suumaya Agros vision for 2023-24 is filled with adding value and increasing efficiency
across the supply and manufacturing chain. The expansion motto were following for the
upcoming year is "Creating value with intelligence".
- Generate a sustainable business with GMV of INR 500 Crore with a GM of 10% for the FY
2023-24.
- Create a healthy ratio of 65:35 of Domestic and Exports Trade, and ratio of 80:20 of
Structured Wetted Trade and Opportunistic Deals.
- Diversify risk by venturing into new commodities including Spices & Dry Fruits,
Pulses, Oilseeds & Veg Oils, Fruits & Vegetables, Super Foods & Food
Ingredients.
- Automate onboarding process for clients and suppliers with digital-first platforms
- Hone the teams trading and analysis experience and expertise
Opportunities & Threats Opportunities
Imports to Increase
Indian Imports to increase in medium term from current US$ 30+ billion at 10% CAGR.
Especially Pulses, Veg Oils and Dry Fruits.
Exports to Increase
Indian Exports to increase from current US$ 50+ billion at 14% CAGR. Especially Spices,
Dry Fruits, Fruits & Vegetables, and Millets.
Modern Trade & AgTech Expanding
Lots of AgTech and Modern Trade players are looking to structured sourcing of agri
commodities.
New Product Lines Emerging
Super foods like millets, berries and Natural/Organic produce markets are expanding.
Trade Getting Organized
FPOs, Multi State Cooperatives, Corporates, and VC backed startups are entering market
trade is getting organized
Stress on Sustainability
Leads to need for traceability, better compliance, enhanced efficiencies, and
accountability in trade.
Threats
- Commodity Volatility and market conditions
- Lack of staffing in key roles
- Abrupt Government Regulations and any policy changes
Risk and Risk Mitigation Risk
- Commodity Volatility and market conditions
- Lack of staffing in key roles
- Abrupt Government Regulations and any policy changes
- Wrong call by the team on forecasts especially for opportunist trade
Mitigating the Risks
- Were enabling a tech-powered agro-trading house with a structured approach
- Creating accessibility to better opportunities by emphasizing long-term revenue
stability
- Generating increasing returns on capital deployed, inducing better margins overall
TEXTILES
Economic Overview
The textile sector in India is at its prime. Dating back to a rich heritage of
traditional handlooms, textiles in the nation have an impressive reputation across the
globe. From local craftsmen to sophisticated mills, the nation is home to a diverse nature
of textile production and distribution. 4% of the global trade in textiles and garments
originates from India.
The economy stands to be the worlds 2nd largest producer of in the industry. As per
reports, a growing consumer demand and production advantages will contribute to a CAGR of
10%, reaching a value of $190 billion by 2025-26. The fundamental power for this growth is
linked to Indias strong production base across major fabrics and natural fibres like
cotton, jute, and wool among others.
In an effort to accelerate this production value, the government has launched PLI
schemes worth $1.44 billion, consequently pushing forward the "Make in India"
initiative. Enjoying an ever-evolving consumer demand and consistent government support,
the industry is on track for a bright future ahead.
Major players, along with the higher authorities, are taking active steps to make this
growth sustainable and beneficial to the environment. The industry is inclining toward
organic fabrics, recyclable materials, and intelligent utilization of technology to
embrace sustainable development.
The textile market is expected to take the front seat in Indias development. With the
increasing exports, distinctive production advantage, and rising consumer demand, the
industry is clearly a strong point for our economy. The overall Indian textiles market is
expected to be worth more than US$ 209 billion by 2029.
Suumayas Vision
Marching forward with a varied product portfolio, smarter sourcing strategies, and a
vision for geographical expansion, Suumayas textile business is on track for unparalleled
greatness. Suumaya intends to capitalize on the industrys growing nature, innovating and
developing to induce overall advancement throughout the organization.
- Increase quality and resilience throughout the supply chain with new vendors with
wide-ranging products and raw materials
- Embracing latest technologies and tools to allow human labour to focus on other
relevant tasks
- Enhancing the sourcing capabilities with quality rapport-building processes
Opportunities & Threats
Opportunities
- Indias versatile textile produce ranging from hand-woven fabrics to capital
intensive mills
- Increasing consumer demand for textiles with the growing per capita GDP
- Rising investor interest and trade opportunities within the industry accelerates
development
Threats
- Tax regimes and GST makes textiles more expensive.
- Lack of accessibility to the latest technologies relative to the global market
- Competition from neighbouring countries
Risk and Risk Mitigation
Risk
- Financial risks occurring due to weak credit cycles
- Disruptions in the supply chain affecting production
- Fluctuating trends among fast fashion causing dead stock
Mitigating the Risks
- Increasing visibility and transparency in the supply chain process
- Insuring trade and evaluating credit facilities of parties involved
- Building a responsible and reliable sourcing strategy
- Staying on top of trends with innovations and expanding product bouquet
RETAIL
Economic Overview
With growing consumer demand, fast-paced digital advancements, and increasing investor
interests
- Indias retail industry has never been healthier. Nodding to its favouring factors,
the nation stands as the 5th largest retail market across the globe. The industry is a
major contributor to nationwide development, accounting for 10% of Indias GDP and 8% of
total employment.
As we see a rise in purchasing power and increasing disposable incomes, the demand for
retail and FMCG goods is only expected to increase with time. Interestingly enough, 61% of
this demand originates from tier II and tier III cities. This points toward a closing
inequality gap across the nation, as we move toward a sustainable and inclusive growth
period.
Indias retail developments are a fascinating feat. With the abundance of labour and
low-cost resources, the sector always has one foot on the accelerator pedal. As a result
of several favouring factors working together, the retail sector is projected to reach a
whopping value of $2 trillion by 2032 - revealed in a report by BCG.
Foreign investors and major players have their eyes set on the Indian retail sector,
given its population abundance, high demand growth, increasing consumer spending and other
factors contributing to a positive future trajectory. The growth is being felt throughout
the nation - from big urban cities to remote rural areas.
In light of the rapid developments, major retailers and government initiatives are
aiming for a sustainable, digital-led transformation across the industry. The digital
revolution paints a picture of a cost-effective, interconnected future for Indias retail.
Overall, Indias retail industry is a transformative era. The long-term growth
prospects seem extremely promising, lined with innovative advancements, favourable
demographics, and new market entrants.
FASHION
Suumayas Vision
Suumayas retail fashion business is booming. We plan to expand our distribution reach
and increase product diversity to facilitate further development and accelerate overall
business growth. The primary plan of action is to identify gaps and fill them with
targeted planning and improvements.
- While we hold strong presence in North and North east of India; we wish to grow our
reach across the entirety of India, and international markets.
- We aim to host a varied and diversified product bouquet under M&A format. This
will bring more power and sustainable growth to the company as a whole.
- We plan to strengthen brand positioning and establish an omnichannel presence in both
Domestic and International markets to exploit the opportunities in the ever-growing retail
industry.
Opportunities & Threats
Opportunities
- Ever increasing domestic demand of consumers in the apparel industry
- Governments PLI schemes are expected to boost the nations textile manufacturing
capabilities and exports
Threats
- Consumers active shift toward fast fashion creates uncertainty in the market.
- Credit cycles are deteriorating and increasing in duration, causing financial
instability
- Inter and intra-nation competition affecting efficiency
Risk and Risk Mitigation Risk
- Inability to conquer international markets with current product portfolio
- Dependency on 3rd party vendors for supply of raw materials
- Lack of innovation in fabrics impacts market growth among fast fashion
Mitigating the Risks
- Expanding product bouquet on EOM basis to cater to a larger Target Group
- Speeding up the Design-to-shelf time to keep up with Fast fashion trends
- Increasing operating flexibility to accommodate and pivot during crisis (e.g
COVID-19)
- Better Quality and Monopolizing sourcing to reduce supplier dependency and increase
innovation in RM
- Inducing credit and pricing control policies
RURAL RETAIL Suumayas Vision
Were aiming for a horizontal and vertical expansion for Suuvidhams horizons. With new
product lines and greater region covered, the companys new era will be filled with
unstoppable development past rural retail barriers.
- After identifying Biscuits, Namkeens, and Chocolate as three potential growth areas,
we plan to establish them as Suuvidhams primary driving force for rural retail
- Introduce EV vehicles in delivery fleet to promote sustainability
- Digitalize the platform end-to-end for increased process efficiency
Opportunities & Threats
Opportunities
- Inefficient supply of FMCGs creates room for increased distribution
- Price war between wholesalers allows brands to work better with us
Threats
- Possibility of the sales representatives starting their own business
- Competing with established and trusted brand names
- Inconsistency in product quality across all MFG plants
Risk and Risk Mitigation Risk
- Retailers spend an average of Rs. 3250 per order
- Local brands lose sales for delays in delivery and lack of product variants
- 69% of consumers now buy directly from local wholesalers
- There exists a market gap in the market availability for small brands
Mitigating the Risks
- We provide both online and offline facilities to order and pay for goods
- Were reducing expenses and transport costs for salesmen and small retailers
- Were closing the market gap by increasing accessibility to local brands
Financial Performance vis a vis operational performance
In continuation with the operational performance highlighted in product wise
performance, the performance of the Company for the financial year ended March 31, 2023,
is as follows:
- Total Net revenue stood at Rs. 22.26 crores for the year ended March 31, 2023, as
against Rs. 155.43 crores for the year ended March 31, 2022
- The EBIDTA (earnings before interest, depreciation and tax) was Rs. (151.01) crores
for the year ended March 31, 2023, as against Rs. (12.99) crores for the corresponding
previous period.
- The profit after tax for the financial year ended March 31, 2023, was Rs. (154.77)
crores as against Rs. (296.15) crores for the corresponding previous period.
FINANCIAL PERFORMANCE VIS A VIS OPERATIONAL PERFORMANCE
STANDALONE KEY RATIOS
| Particulars |
FY2022-23 |
FY2021-22 |
Reason |
| Debt-equity Ratio |
0.09 |
0.07 |
Due to higher rate of finance cost and net loss of the company debt to equity ratio
increased marginally. |
| Inventory turnover (Days) |
1.92 |
0.4 |
Due to increase in closing stock at the end of the year, in the revised business model
company can convert its inventory into cash and profit. |
| Debtors Turnover |
768.00 |
3.11 |
Due to reduction in overall turnover of the company. Average collection from customer
increased. |
| Interest Coverage ratio |
(56.69) |
78.51 |
Due to increase in expenses, provisions and reduction in turnover, profitability of
the company declined which leads to negative interest coverage ratio. |
| Current ratio |
2.32 |
1.79 |
Due to BTA of Agro Business, total current assets improved and average collection from
debtors is also improved which leads to improving in overall working capital cycle in
effect current ratio improved. |
| Operating Profit Margin (%) |
(741.63) |
8.80 |
Due to increase in expenses and provisions and reduction in turnover, profitability of
the company declined which leads to negative operating profit margin ratio. |
| Net Profit Margin (%) |
(6.95) |
6.36 |
Due to increase in other expenses, finance cost and provisions, net profitability of
the company declined which leads to negative net profit margin ratio. |
CONSOLIDATED KEY RATIOS
| Particulars |
FY2022-23 |
FY2021-22 |
Reason |
| Debt-equity Ratio |
0.38 |
0.75 |
The company had repaid overall long-term borrowing as a result of which there is
significant positive impact in the debt-to-equity ratio. |
| Inventory turnover (Days) |
12.64 |
2.70 |
Due to increase in closing stock at the end of the year and in the revised business
model company can convert its inventory into cash and profit. |
| Debtors Turnover |
601.00 |
12.81 |
Due to reduction in overall turnover of the group. Average collection from customer
increased. |
| Interest Coverage ratio |
(84.87) |
126.90 |
Due to increase in expenses, provisions and reduction in turnover, profitability of
the company declined which leads to negative interest coverage ratio. |
| Current ratio |
1.62 |
1.96 |
Increase in current liability and provision due to which current ratio of group
companies decreased marginally |
| Operating Profit Margin (%) |
(82.62) |
8.11 |
Due to increase in expenses and provisions and reduction in turnover, profitability of
the company declined which leads to negative operating profit margin ratio. |
| Net Profit Margin (%) |
(0.71) |
6.80 |
Due to increase in other expenses, finance cost and provisions, net profitability of
the company declined which leads to negative net profit margin ratio. |
Internal control and system adequacy
The Company has effective and adequate internal audit and control systems, commensurate
with the business size to safeguard assets and protect against loss from any unauthorised
use or disposition. Regular internal audit visits to the operations are undertaken to
ensure that high standards of internal controls are maintained at each level of the
organisation. The Companys internal controls are supplemented by an extensive programme
of internal audits, reviewed by management and documented policies, guidelines and
procedures.
Human resources
Suumaya Industries Limiteds human resource practices helped reinforce market
leadership. The Company invested in formal and informal training as well as on-thejob
learning. It emphasised engagements with employees by providing an enriched workplace,
challenging job profile and regular dialogues with the management. The Company enjoys one
of the highest employee retention rates in the industry; it creates leaders from within,
strengthening prospects. During the year end, the Company had 68 employees.
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