MANAGEMENT DISCUSSION AND ANALYSIS REPORT
a) Overview:
Indias GDP touched the $3.75 trillion mark in 2023. India is called the "bright
spot" in the global economy. Shining as the 5th largest economy in the World as
against standing 10th in World ranking last year.
The private sector has caught up with the pre-pandemic trend as though the pandemic did
not happen. The catch-up has been swift in some sectors while some have shown steady to
slow improvement.
Your company has a diverse profile with certain businesses complementing one another.
The year under review has shown steady growth from the previous year 2022. Our
turnovers have seen a significant rise in the last quarter of the financial year 2022-23.
Your company has fostered major growth in the Energy sector and witnessed revenue jump
from Rs. 50 cr to Rs. 205 cr. Following the sunrays is our veteran business - Textile,
with an improved revenue of Rs. 245 cr as against Rs. 170 cr in the previous year. We have
two new business segments giving us revenue of Rs. 299 cr and Rs. 360 cr in Petrochemical
Distribution & Development and Warehousing respectively.
b) Industry Structure and Development:
Energy:
Indias power sector has experienced a remarkable transformation in providing
sustainable, reliable, and affordable energy to the people. The Oil & Gas market size
of India is expected to grow from 36.24 billion cubic meters to 46.69 billion cubic meters
by 2028.
Over the years, India has enhanced its power generation capacities, promoted renewable
energy, and implemented innovative policies. These efforts have led India to jump up to 4th
position in Renewable Energy Installed Capacity, globally, with 43% of its total capacity
yielded from non-fossil energy sources. India is committed to reaching net zero emissions
by 2070. 62% of the countrys power requirements are likely to be met through non-fossil
fuels by 2030.
India shall pursue a diversified energy strategy to meet the exponential growth in
energy demand. The increasing demand for LNG is a valuable leverage in achieving the
committed energy mix. India shall soon shift to a gas-based economy and zero-carbon fuels.
Indias oil demands are estimated to rise to 11% from the current 5% in the global market
over the years.
In the foreseeable future, Indias gas demand will grow over 500% as the country
targets to raise the share of gas to 15% in its energy mix by 2030 from 6% currently.
The energy vertical of your company has performed four times its previous year with a
profound figure of Rs. 205 cr revenue as against Rs. 50 cr in 2021 - 2022.
Textile Industry:
India is the 3 d largest exporter of textiles and apparels in the world. In
global trade, India has a share of 5% in textiles and apparel. Indias domestic apparel
and textile industry contributes approximately 2% to the countrys GDP. India is one of
the largest producers of Jute and Cotton in the world. 95% of the worlds hand-woven
fabric comes from India.
The Indian technical textiles segment is estimated at $16 billion, approximately 6% of
the global market. The textile industry in India is the 2nd largest employer,
providing direct employment to 45 million people and 100 million people in its allied
industries.
The industry is estimated to reach a $250 billion business size by 2025.
There is a rise in demand for low-cost produce with sustainable and
environment-friendly production processes. Further rise and inclination towards digital
technology, use of capitalintensive technology, MMF textiles and apparel, etc. have led to
innovative and efficient production.
An optimistic view suggests with the stabilization of the geopolitical tensions, the
textile sector will showcase upscale trends fostering new opportunities, and technological
innovations towards sustainable growth.
Your company is on the sunrise wagon with an improved performance of Rs. 245 cr from
Rs. 170 cr. We aim to score higher with innovative trends and trade demands.
Real Estate:
The real estate sector is one of the most popular industry globally. It has four
classifications: housing, retail, hospitality, and commercial. The real estate sector
ranks 3rd among the 14 major sectors of the world economy. The Indian real estate market
is expected to reach a $1 trillion market size in 2030 which is $200 billion up from 2021.
Post-COVID, tier 2 and tier 3 cities have come into the limelight.
The sector has seen a lot of NRI investments in the long term and short term. Bengaluru
is expected to be a popular choice followed by Pune, Chennai, Ahmedabad, Goa, Delhi, and
Dehradun.
Your company is moving with market trends and has successfully launched sales of our
first luxury residential project in Yashwantpur, Bengaluru. We have had to face challenges
due to the volatility of raw material prices as a result the construction cost has
increased. However, there has been steady growth in this business vertical and we are
looking forward to the advancement of this business. We have plans to develop our lands in
Bengaluru. We are also evaluating projects under MHADA, MCGM, and SRA schemes.
Distribution & Development:
In the last quarter of 2022-2023, your company acquired majority stakes in Veritas
India Limited, and the Petrochemical Distribution and Development division was
incorporated. This is a green field sector for Swan as it has the potential of exponential
growth. In the first quarter of its inception, the sector has given you a Rs. 299 cr
revenue and still counting.
Warehousing:
The warehousing business has come a long way from just another place of storage to
state-of-the- art, automated, technically advanced storage industry.
Warehousing is currently considered the sunrise industry and is foreseen as one of the
high- performing verticals of your company. It has proved to be the cash cow for your
company in the last quarter of 2022-2023 with a staggering revenue of Rs. 360 cr.
Shipbuilding:
Shipbuilding is an integral sector of the global economy. India is looking forward to
achieving strategic independence in shipbuilding and developing niche technology in this
sector. Taking forward the Make In India movement, shipbuilding industry is the blue-eyed
sector of our economy.
Your company is in process of acquiring RNEL and is now on the move to acquire the
potential business in this sector; with innovation and best-in-class technology as per
industry standards.
c) Opportunities:
The energy sector has enormous potential and growth opportunities. As India is racing
towards achieving zero carbon emissions, the country has adopted a mixed energy strategy -
thus increasing the business potential in the Energy Sector.
Your companys core objective of innovation and sustainability is the major driving
force that shall sail us through this dynamic yet high-potential industry. Your company
owns the first Indian flagbearing FSRU through its subsidiary Triumph Offshore Pvt. Ltd.
and has leased out the regasification ship to Botas, Turkeys state-owned natural gas and
LNG firm. It is a wholesome revenue for your company under the bareboat charter,
extendable on mutual understanding after 12 months.
In textiles, with innovation and new technologies crowding the industry, scope and
spectrum of clientele have increased.
With Make in India at its peak, potential domestic and international exports are
showing us new horizons. The textile sector is expected to surmount the 2% contribution to
Indias GDP by 2025. The growing FDI is one of the major opportunities for the textile
sector.
The petrochemical industry has emerged as one of the leading drivers of global oil
consumption. The industry has experienced a strong demand in 2022 and there are
speculations of a consistent growth in the demand across the world by 2030. About 80% of
Indias petrochemical capacity is integrated with petroleum refineries. This gives India
an edge in terms of petrochemical feedstock certainty.
These market conditions are conducive to a better and brighter future for your
companys petrochemical manufacturing and trading vertical. Impact of which are visible in
the last quarter of 2022-2023.
Real Estate is a sector that has experienced dynamic changes in business as well as
consumer outlook. COVID has done its magic on the real estate industry as a house is no
longer just a roof for people to live in, but it has become peoples safe place for kids
playschool, an office for working professionals, a basic investment for budding
entrepreneurs, a recreation shelter to relax and unwind under your own secure surrounding.
Leading to NRI investments, and other long-term and short-term investments. The government
has also influenced this trend by introducing favorable policies. Your company has shown
steady growth this year. In the foreseeable future with the pipeline projects, the sector
looks to be a promising division.
d) Threats, Risks, and Concerns:
Energy:
The volatility of oil prices due to international tensions, terrorism, and inadequate
domestic supply is a major threat to the sector.
The unpredictable geopolitical situation pose a major risk to this industry as the
projects, investments, ROI assumptions are disturbed. India has a low domestic energy
production and a high level of energy loss in T&D and reliance on imported fossil
fuels are concerns for the sector.
Textile:
The textile sector is the 2nd largest industry in India but it also has its
own share of threats and concerns. Over-dependency on manual efforts is a major concern
for the textile industry. The fastchanging fashion is a big challenge for the sector as it
increases waste. This industry is infamous for its high pollution rates and catering to
the ever-changing trends and fashion is risky. The unavailability of raw materials and
infrastructure bottleneck is an incomprehensible threat to the textile industry.
Real estate:
Real estate provides opportunities to 100 allied businesses, similarly the allied
industries pose a threat to the real estate industry major factor being, the
unavailability of timely raw materials. The volatile material cost leads to variations in
project cost. With regard to the war tensions worldwide, there is regulatory uncertainty.
The supply chain is disrupted, and heavy competition are a few pain points faced by the
real estate industry.
Petrochemical:
The volatility of crude oil prices is a major threat to the petrochemical manufacturing
and trading industry of your company, leading to constant erosion in margins. The
shortfall in petrochemical intermediate capacity is another point of concern and threat
for the petrochemical manufacturing and trading industry.
Your company is well-placed to face all of these threats, risks, and concerns.
e) OUTLOOK:
Your company remains committed to upholding the highest standards of governance,
transparency, and ethical practices. With India racing towards growth and becoming a
strong economy, we look forward to emerge as a strong, reliable, and sustainable company.
Together, we shall embrace the future with optimism, determination, and the desire to
build a brighter tomorrow.
(f) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The internal control systems of your company are adequate and appropriate. It is being
reviewed periodically to ensure that the Companys interest and that of the stakeholders
is protected. The process of introducing new inbuilt internal checks and controls is
continuous depending upon the requirement of the same.
The Audit Committee of the Board reviews the adequacy and effectiveness of the internal
controls and checks and suggests desired improvements from time to time.
(g) FINANCIAL AND OPERATIONAL PERFORMANCE:
|
|
(Rs. in lakhs) |
| Particulars |
For the year ended 31st March, 2023 |
For the year ended 31st March, 2022 |
| Sales |
54,722.62 |
40,871.55 |
| Other Income |
250.49 |
103.25 |
| Profit before Depreciation and Tax |
1,279.06 |
1,081.23 |
| Depreciation |
798.90 |
600.39 |
| Taxes |
116.66 |
163.04 |
| Profit/ (Loss) after depreciation and taxes |
363.50 |
317.80 |
| Add: Comprehensive Income |
11.41 |
11.32 |
| Total Comprehensive Income |
374.91 |
329.12 |
(h) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRY RELATIONS FRONT, INCLUDING
NUMBER OF PEOPLE EMPLOYED:
The Company continues to give utmost importance to Human Resources Development and
keeps relations normal. As on 31st March, 2023, there are 127 employees,
including 3 whole time directors.
Industrial relations continue to be harmonious and normal.
(I) KEY FINANCIAL RATIOS:
| Sr.No. |
Ratios |
31.03.2023 |
31.03.2022 |
% variation |
Remarks |
| I |
Debtors Turnover |
2.66 |
3.52 |
-24% |
|
| ii |
Inventory Turnover |
5.71 |
4.94 |
16% |
|
| iii |
Interest Coverage Ratio |
1.30 |
1.61 |
-19% |
|
| iv |
Current Ratio |
1.10 |
1.60 |
-31% |
Increase in short term borrowings. |
| v |
Debt Equity Ratio |
0.22 |
0.09 |
157% |
Increase in total borrowings. |
| vi |
Operating Profit Margin |
3.87% |
5.24% |
-26.% |
Incremental revenue in FY 23 with relatively thinner margins as compared to FY22 |
| vii |
Net Profit Margin |
0.69% |
0.81% |
-15% |
|
| viii |
Return on Net Worth |
0.29% |
0.26% |
14% |
|
(j) PRECAUTIONARY STATEMENT:
This report contains forward looking statements that address expectations and
projections about the future, based on certain assumptions of future events. Companys
actual results, performance or achievements may, thus, differ materially from those
projected in any such forward looking statements.
|
For and on behalf of the Board of Directors |
|
(Navinbhai C. Dave) |
|
Chairman |
| Mumbai, 14th August, 2023 |
(DIN: 01787259) |
+91-9892691696
