Your Directors have pleasure in presenting the management discussion and analysis report for the year ended 31st March, 2022
(A) INDUSTRY STRUCTURE AND DEVELOPMENT
Talbros Engineering is engaged in manufacturing Rear Axle Shafts for leading automobile companies in India and foreign markets. The automobile sector received cumulative equity FDI inflow of about US$ 30.78 billion between April, 2000 and September, 2021. The Govt, of India expects automobile sector to attract US$ 810 million in local and foreign investments by 2023. In calendar Year 2021, all segments showed growth and total sales increased by 5.8%. India enjoys a strong position in the global heavy vehicles market as it is the largest tractor producer, second largest bus manufacturer and third largest heavy trucks manufacturer in the world. In Financial year 2021-22, the Companys exports sales showed a growth of around 50% and expects to continue this growth with a continued focus on exports.
(B) OPPORTUNITIES AND THREATS
The Company has world class manufacturing facilities located at Faridabad and Hathin in Flaryana and is equipped with the latest in technology and a highly qualified engineering team. The Company is continuously striving on better and automated technology adoption for effective and efficient working and to walk out of the competition queue. The Company is working proactively with customers to diversify its existing product portfolio and enter into new market segments. The Company has successfully developed and started supplies of torsion bars, spindles, front axles, and camshafts. In international business, our largest market is North America and we also serve some small customers scattered across various Central and South American countries. The company is also actively working on developing new business in Europe.
Besides opportunities, the Company also faces threats which include shifts in the tastes of customers from SUV segment cars to small eco-friendly and electric cars due to continuous increase in fuel prices and heavy traffic on roads. The competition is rising day by day and installation of excess capacity can escalate the risk of a price war in the event of an economic downturn.
(C) SEGMENT-WISE OR PRODUCT WISE PERFORMANCE
The Companys performance is primarily based on one product i.e. Rear Axle Shafts. The company continues to undertake steps for improvement and growth.
(D) OUTLOOK
The Company does not foresee any major threats to its growth and market share in the coming years. The infrastructure need of the company have also been completed by investing in a new production site. The company does not foresee any technological obsolescence for its products as our product is primarily drive train.
(E) RISKS AND CONCERNS
The Company has its step wise risk management system which includes identification of risk at different levels including internal and external business risks. The risks so identified have been properly assessed and analysed at each level. After that, the corrective and preventive measures are taken by the Company to overcome the identified risks. The management review the risks every half year.
(F) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has adequate internal control procedures commensurate with the size and structure of the Company. The company has also engaged the services of independent Chartered Accountant to carry out the internal audit and to identify the proper and adequate internal control system and sufficient measures are taken to update the internal control system. The implementation of SAP has resulted in better management and system development. The system also ensures that all transactions are appropriately authorised, recorded and reported.
(G) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
Your Company has achieved a sales turnover of Rs. 35,114 Lakhs in this financial year ended on 31s1 March, 2022 as against Rs. 23,886 Lakhs in the previous financial year. Net profit after tax for this year stands at Rs. 2,216 Lakhs as against Rs. 1,076 Lakhs in previous year. Exports turnover (F.O.B. Value) for the year ended on 3181 March, 2022 is Rs. 8,311 Lakhs as compared to Rs. 5,737 Lakhs in the previous financial year.
(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED
As on March 31,2022, the Company had 193 number of permanent employees at its manufacturing plants and administrative office located at Faridabad and Hathin.
The company considers the employee values and ensures proper encouragement both morally and financially to motivate them. The relationship between the management and employees is remarkable. Regular trainings and workshops have been conducted to motivate the employees for better understanding of upgraded technologies.
(I) KEY FINANCIAL RATIOS
Ratios | 31 st March, 2022 | 31 st March, 2021 | Change in % |
1 Debtors Turnover | 4.94 | 5.90 | (16.23%) |
2 Inventory Turnover | 7.28 | 5.98 | 21.82% |
3 Interest Coverage Ratio | 5.34 | 4.76 | 12.03% |
4 Current Ratio | 2.47 | 2.59 | (4.57%) |
5 Debt Equity Ratio | 0.63 | 0.47 | 33.26% |
6 Operating Profit Margin (%) | 12.85% | 11.66% | 10.10% |
7 Net Profit Margin (%) | 8.30% | 6.05% | 37.12.% |
The Debt Equity Ratio has increased due to increased borrowings by the Company to finance upcoming expansion.
Net Profit margin has improved due to improvement in operating margins during the year.
(J) RETURN ON NET WORTH
The return on net worth for the current year ended on March 31, 2022 is 28.92% as compared to 16.71% during the fiscal year ended on March 31, 2021.
For and on behalf of the Board | |
Sd/- | Sd/- |
Vijay Kumar Sharma | Sanjay Sharma |
Executive Director | Executive Director |
DIN:06394784 | DIN:06394774 |
R/o H. No. 309, Sector 3, | R/o H. No. 1002, Sector 8 |
Faridabad, Haryana | Faridabad, Haryana |
Place: Faridabad | |
Date : 20.06.2022 |
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www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.