Global economyOverview: The global economy was estimated to have grown at a slower
rate of 3.2% in 2022, compared to 6% in 2021 (which was on a smaller base of 2020 on
account of the pandemic effect). The relatively slow global growth of 2022 was marked by
the Russian invasion of Ukraine, unprecedented inflation, pandemic-induced slowdown in
China, higher interest rates, global liquidity squeeze and quantitative tightening by the
US Federal Reserve.
The challenges of 2022 translated into moderated spending, disrupted trade and
increased energy costs. Global inflation was 8.8% in 2022, among the highest in decades.
US consumer prices increased about 6.5% in 2022, the highest in four decades. The Federal
Reserve raised its benchmark interest rate to its highest in 15 years. This resulted in a
conclusion that the following year will be slower.
The global equities, bonds and crypto assets reported an aggregated value draw down of
USD 26 trillion from peak, equivalent to 26% of the global gross domestic product (GDP).
In 2022, there was a concurrently unique decline in bond and equity markets; 2022 was the
only year when the S&P 500 and 10-year US treasuries delivered negative returns of
more than 10%.
Gross FDI inflows - equity, reinvested earnings and other capital - declined 8.4% to
USD 55.3 billion in April- December. The decline was even sharper in the case of FDI
inflows as equity - these fell 15% to USD 36.75 billion between April and December 2022.
Global trade expanded by 2.7% in 2022 (expected to slow to 1.7% in 2023).
The S&P GSCI (benchmark for commodity investments and a measure of global commodity
performance) fell from a peak of 4288 in June 2022 to 3233.4. Brent crude oil dropped from
a peak of around USD 120 per barrel in June 2022 to USD 80 per barrel at the end of the
calendar year following the enhanced availability of low-cost Russian oil.
Outlook: The global economy is projected to grow a weak 2.9% in 2023, marked by
sustained Russia-Ukraine conflict and higher interest rates. Global inflation is projected
to be 6.5% in 2023 (Source: IMF). On the positive side, the reopening of Chinas economy
after the waning of the pandemic, the decline in the European energy crisis and robust US
consumption outlook (despite high inflation) remain positive. Interestingly, even as the
global economy is projected to grow less than 3% for five years, India and China are
likely to account for half of the global growth in 2023.
Global mining industry overview
The global mining market enhanced The mining market is expected to grow to be the
fastest growing energy source, from USD 2022.6 billion in 2022 to USD to USD 2,775.5
billion in 2027 at a CAGR with the consumption enhancing at an2,145.15 billion in 2023 at
a CAGR of 6.1%. of 6.7%. Renewable energy is expected average rate of 2.3% per year till
2040.
Indian mining industry overview
India enjoys a strategic advantage in the production and conversion costs of steel and
alumina which is leading to fast developing export opportunities.
The number of reporting mines in India stood at 1,425 in FY 2021-22 out of which
reporting mines for metallic minerals were estimated at 525 and non-metallic minerals
stood at 720. Growing infrastructure development and automotive production are driving the
growth in demand of mineral resources. Demand growth in power and cement industries is
also aiding the growth of the sector. Demand for iron and steel is expected to continue
due to strong growth expectations for the residential and commercial building industry.
Mineral production in India is estimated at Rs190,392 Crore in FY 2021-22. India ranks
fourth in terms of iron ore production across the globe. The country produced 204 Million
Tonnes of iron ore between April 2021 and January 2022. Indias crude steel production
stood at 71.3 Million tonne until October 2022. Domestic finished steel production in
India in 2022 stood at 78.09 Million Tonnes as against 73.02 Million Tonnes during
2021. India manufactures more than 85 minerals consisting of lignite, bauxite,
chromite, copper ore and concentrates, iron ore, manganese ore, silver, diamond,
limestone, phosphorite and others. The key mining states of India include Andhra Pradesh,
Jharkhand, Odisha, Rajasthan, Karnataka, Madhya Pradesh and Maharashtra. Government
reforms like the Make in India campaign, smart cities, rural electrification, and a focus
on building renewable energy projects under the National Electricity Policy is expected to
push the growth of the countrys mining industry (Source: PIB, IBEF)
Global mineral processing industry overview
The global mineral processing market size stood at USD 8,3150 Million in 2021and is
expected to reach USD 16,8130 Million in 2028. Growing industrialisation, urbanisation and
expansion in the mining industry is driving the requirement for natural minerals and
processing. The mineral processing market is divided into types like: crushing, screening,
grinding and classification. Growing demand for iron ore, copper, other metals and
minerals is estimated to catalyse the demand for copper, aluminum and other metals.
Growing emphasis to use environment-friendly mining tools is catalysing the demand for
safe mining equipment for the environment. (Source: nebraska.com)
Global copper mining industry overview
As per the industry consensus data, global mine production of copper amounted to
Rs.21.1 Million Tonnes in 2021, growing 2% higher than 2020 (Rs.20.7 Million Tonnes).
Chile remained as the top copper producer, followed by Peru and China. Mine copper
production is expected to enhance to 23 Million Tonnes in 2023 and further increase to 24
Million Tonnes in 2024. The countrys production growth is largely catalysed by higher
production in Chile, Peru and the Democratic Republic of Congo.
Chile and Peru is expected to retain its position as the largest copper producers
in the coming years, contributing around 25% and 12% of world population in 2024.
Significant investment in production capacity in Indonesia is expected to among the
biggest drivers of world production growth between 2022 and 2024. (Source: Kitco.com)
Global gold mining industry overview
Global gold mining market was pegged at USD 204.27 billion in 2022 and is expected to
grow at a CAGR of 5.3% to reach USD 264.31 billion by 2027. Global gold mining market is
expected to witness a healthy growth due to a significant increase in disposable income of
consumers across the globe. Moreover, key factors catalyzing sales of gold products
comprise transforming consumer preferences along with the growing population of
high-net-worth individuals. Besides, different customs followed by people across the globe
regarding the adoption of ornaments and gems are further expected to significantly
increase the purchase of products. Global gold mine production is expected to enhance by
2.2% to 3,660 Tonnes in 2022 due to increased production in China, Australia, North
America and West Africa. New projects in Canada, Chile, Brazil and Argentina are expected
to increase gold output in North America, Central and South America by 124 and 82 Tonnes
by 2026 respectively. (Source: Research and Markets, Kitco.com)
Company overview
Tega Industries Limited is the flagship company of the Tega Group of companies,
promoted by the Mohanka family. Incorporated in 1976, the Company is among the top
manufacturers of specialised critical to operate and recurring consumable products for
the global mineral benefication, mining and bulk solids handling industry. The Companys
headquarter is located in Kolkata. The Company provides a range of specialised abrasion
and wear-resistant rubber, polyurethane, steel and ceramic based lining components
required for mining and mineral processing, screening, grinding and material handling.
At present, Tega is regarded as the second largest producer of polymer-based mill
liners. The Company exports to 70+ countries and its manufacturing facilities are located
in India, South Africa, Australia and Chile.
Financial overview
Analysis of the Profit and Loss Statement
Revenue: Revenues from operations reported a 27.55% increase from Rs.9,517.56
Million in FY 2021-22 to reach H12,139.72 Million in FY 2022-23. Other income of the
Company accounted for a 1.70% share of the Companys revenues, validating the Companys
reliability in its core business operations.
Expenses: Total expenses of the Company increased from Rs.8,237.98 Million in FY
2021-22 to H10,028.75 Million. Raw material costs, accounting for 43.46% share of the
Companys revenues,
increased from 42.30% in FY 2021-22. Employee expenses, accounting for a 13.40% share
of the Companys revenues, increased from Rs 1,434.21 Million in FY 2021-22 to 1,627.01
Million in FY 2022-23.
Analysis of the Balance Sheet
The capital employed by the Company increased by 42.85% from Rs 9,509.78 Million as of
March 31,2022, to Rs 13,584.47 Million as of March 31,2023. The net worth of the Company
increased by 42.52% from H7,360.35 Million as of March 31,2022, to H10,489.92 Million as
of March
31,2023, due to our growth in reserves and surplus. The Companys equity share capital
stood at 66,354,112 equity shares of H10 each as of March 31,2023.
Long-term debt of the Company increased by 88.82% to Rs 1,681.82 Million as on March
31,2023. Net debt-equity ratio of the Company stood at 0.07 in FY 2022-23 compared to
(Nil) in FY 202122. Finance costs of the Company increased by 11.82% from H162.04 Million
in FY 2021-22 to H181.20 Million in FY 2022-23 following the repayment of liabilities.
Key ratios
Particulars |
Formula |
FY 23 |
FY22 |
Debt-equity ratio |
Total Borrowings/Total Equity |
0.30 |
0.29 |
DebtorsTurnover (days) |
Trade Receivable/(Sales of Products & Services/365) |
123.21 |
108.00 |
Inventory Turnover (days) |
Inventories/((Cost of Materials Consumed +Change in inventories of
finished goods and work-in-progress)/365) |
200.34 |
228.00 |
DebtorsTurnover (x) |
Sales of Products & Services/Trade Receivables |
2.96 |
3.37 |
Inventory Turnover(x) |
(Cost of Materials Consumed+Change in inventories of finished goods
and work- in-progress)/Inventories |
1.82 |
1.60 |
Interest Coverage Ratio (x) |
EBITDA/Interest Expenses |
16.06 |
12.78 |
Current Ratio (x) |
Current Assets/Current Liabilities |
2.53 |
2.32 |
Operating EBITDA margin (%) |
(EBITDA minus Non Operating Income)/ Revenue from Operations |
22.28 |
19.21 |
Net Profit margin (%) |
Profit after Tax/Revenue from operations |
15.16 |
12.28 |
Risk management
Competition risk: The entry of new competitors might affect the Companys market
share and profitability.
Mitigation: The Company started its operations in 1976 with a robust brand recall
in exports across 70+ countries.
At present, the Company is the second- largest producer of polymer-based mill liners in
the world. Besides, the Company has employed significant capital mechanisms for product
customisation as per consumer needs to maintain a competitive position.
Economic risk: The incidences of any further slowdown across the globe might hamper
the demand, affecting the Companys financial performance.
Mitigation: The global economy bounced back by 7.2% in FY 2022-23 after the
downtrend of 6.6% in FY 2020-21.
The mines were continuously operational as temporary shutdowns of mines are expensive
creating strong demand for critical mining consumables for regular operations.
Technology risk: Outdated technology might hamper the Companys manufacturing
potential and performance.
Mitigation: The Company is continuously driving research and development efforts.
The special team is actively focusing on new product development with a primary aim to
deliver premium products and solutions. Higher research activities, advanced research and
development centres and innovation have made us an industry leader.
Employee risk: People retention might be moderated due to the Companys inability
to maintain a strong work environment.
Mitigation: The Companys employee base stood at 1281 as on March 31,2023,the
Company undertook necessary measures to retain its talent.
Geographic risk: Reliance on specific geographies can affect the Companys
financial health.
Mitigation: The Companys clients are present across India, Asia Pacific, South
America, North America, Europe, the Middle East and Africa. Besides, the Company has
global and domestic sales offices located near the major customers and mining sites.
Compliance risk: The Companys inability to comply with regulatory norms has
resulted in penalties being levied.
Mitigation: The Companys operations are aligned with the statutory and regulatory
permits and the approvals are timely renewed. Besides, the Company stays updated with the
latest regulatory norms and compliance.
Internal control systems and adequacy
The internal control and risk management system are structured and applied by the
principles and criteria established in the corporate governance code of the organization.
It is an integral part of the general organizational structure of the Company and the
Group and involves a range of personnel who act in a coordinated manner while executing
their respective responsibilities. The Board of Directors offers its guidance and
strategic supervision to the Executive
Directors and management, monitoring and support committees. The control and risk
committee and the head of the audit department work under the supervision of the Board
appointed Statutory Auditors.
Human resources
The Company believes that its dedicated and motivated employees are its greatest asset.
Your Company now has offered competitive compensation, healthy work environment and the
employee performances are recognized through a planned reward and recognition programme.
Your Company intends to develop a workplace where every employee can recognize and attain
his or her true power. Your Company motivates individuals to undertakevoluntary projects
apart from their scope of work that helps them to learn and nurture creative thinking.
Your Companys employee strength stood at 1281 as of March 31, 2023.
Cautionary statement
This statement made in this section describes the Companys objectives, projections,
expectations and estimations which may be forward-looking statements within the meaning
of applicable securities laws and regulations.
Forward-looking statements are based on certain assumptions and expectations of future
events. Your Company cannot guarantee that these assumptions and expectations are accurate
or will be realized by the Company. The actual result could differ materially from those
expressed in the statement or implied due to the influence of external factors which are
beyond the control of the Company. Your Company assumes no responsibility to publicly
amend, modify or revise any forward-looking statements based on any subsequent
development.
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