undefined share price Management discussions


1. Industry structure and developments Industry Overview

The impact of Pandemic is fading gradually and Industry is in Third year of recovery from the regression in Industry. It is undeniable fact that infrastructure is key accelerator in Nations Growth, and thus, has intense focus from the Government for initiating policies that would ensure the countrys time-bound creation of world-class infrastructure.

With huge ongoing project opportunities, it is the third largest contributor to economic growth. Various governmental flagship programs like PM Awas Yojna, PM Gati Shakti, Make in India and Kawach will further drive growth. Due to continuous urbanization, upcoming infrastructure projects and a growing population base, the construction industry in India is booming. The industry employs more than 50 million people and has a large pool of low-cost workers. Owing to these efforts and governments will to increase public private partnerships with foreign companies, it is expected to attract more foreign investment.

Covid Impact

COVID crisis-affected this sector adversely. The sector was battling from the liquidity crunch. For the major part of 2020, the construction sector in India was overcoming the labor shortage and supply chain disruptions of their raw material. Now the sector is recovering from regression steadily.

Our Company

Our Company was incorporated in the year 2012 for undertaking various construction activities. We are a construction company providing integrated civil works contracting and engineering services for structural construction and infrastructure sector projects and are a registered contractor with the Government of Maharashtra Public Works Department in Class I-A. Our Company engages in contracting and sub-contracting for various government and private projects which includes construction of commercial structures and industrial structures. Our Company is situated at Nashik and many of our project sites are located in the State of Maharashtra, though we have undertaken projects in other parts of India. Majority of the construction activity being undertaken by us includes civil & structural construction and infrastructure contracts under subcontracting by main contractors, who have been allotted the project by a principal employer.

Our Companys revenue model also includes trading of certain construction materials. Besides undertaking contracted and / or sub-contracted projects, our Company is also engaged in trading activities, wherein we supply construction materials to our various clients as per their specific requirements.

The company got listed on NSE Emerge (SME platform of National Stock Exchange of India) on 15th October, 2020. Further, the Shares of the company have migrated from NSE Emerge to NSE and BSE Limited on 12th May, 2023. We have experienced a steady growth in recent years and expect our businesses to continue to grow significantly. Our future growth is subject to risks arising from a rapid increase in order volume, and inability to retain and recruit skilled staff. Although, we plan to continue to expand our scale of operations through organic growth or investments in other entities, we may not grow at a rate comparable to our growth rate in the past, either in terms of income or profit or work quality.

2. Opportunities and Threats

The Company has been continuously striving to keep its costs to minimum possible to aggressively compete with Indian & global competitors. The lockdowns and restrictions imposed on various business operations due to COVID 19 pandemic have created several obstacles in day-to-day activities of the company. Corporate and regional offices were shut, but the Company adopted the work from home policy during the duration of the lockdown. And in the very initial stage of this pandemic outbreak; the top level management Suo-moto decided to make arrangements for sanitization, thermal screening, and use of masks, staggered working and lunch schedules for whole staff members.

3. Segment-wise or product-wise performance

The Company is dealing in only one segment i.e., Construction (provides integrated contracting and sub-contracting services for civil and industrial construction, engineering and complete infrastructure project management). During the year the Company has made profound achievements by successfully delivering significant project for notable organisations available on the website of the company www.atalrealtech.com .

4. Outlook

Our Focus remains to lead from the front & craft a brand name, by delivering value to our esteemed clients in the construction sector and keep our customer base satisfied across Private bodies, Government or Semi Government or local bodies and to become the most preferred Construction services company with innovation and integrity.

5. Risk and Concerns

Your company is faced with risk of different types, each of which needs varying approaches for mitigation. It has identified each of the risk and implemented measures to mitigate such risk with the help of competent senior management and outside specialist consultants. Competition is one the risk mentioned above. The Company has been handling the risk of competitive forces through its organised business approach, by the strength of reach, Super quality of services, experienced management and maintaining high level of security standards with employees.

6. Internal Control Systems and their Adequacy

The Companys internal control systems are adequate, operating effectively and commensurate with the size of business. These internal control systems are provided through competent management, implementation of standard policies and processes, maintenance of an appropriate audit programme with an internal control environment, effective risk monitoring and management information systems. Moreover, the Company continuously upgrades these systems in line with the best available practices.

The internal control systems are supplemented by extensive internal audits, regular reviews by the Management and standard policies and guidelines to ensure the reliability of financial and all other records to prepare financial statements and other data. The Company has regular checks and procedures through internal audits conducted by an independent audit firm, periodically. The reports are deliberated and an executive summary of the same along with Action Taken Reports (ATR) and steps taken by the Management to address the issues, are placed before the Audit Committee meeting/ Board meeting for their review. Reports of internal auditors are reviewed by the Audit Committee, and corrective measures, if any, are carried out towards further improvement in systems and procedures in compliance with Internal Control Systems. The Board also recognizes the work of the auditors as an independent check on the information received from the Management on the operations and performance of the Company.

7. Discussion on financial performance with respect to operational performance.

During F.Y. 2022-23, Company has earned a total income of Rs. 4068.84 lakhs compared to previous years Rs. 4056.02.

Net profit after tax has increased from Rs. 215.51 Lakhs to Rs. 217.30 Lakhs Consequently, EPS decreased to 1.47 per share from Rs. 4.37 per share, as the company were issued Bonus shares during the year.

Further information on financial performance with respect to operational performance is given in Financials Annexed.

8. Future Projections:

Despite near-term challenges in certain construction sectors, medium to long term growth story in India remains intact. The construction industry in India is expected to grow steadily over the next four quarters.

The construction industry market in India works across 250 sub-sectors with linkages across sectors. The growth momentum is expected to continue over the forecast period, recording a CAGR of 9.9% during 2023-2027. The construction output in the country is expected to reach INR 66,954.8 billion by 2027. Both the state and the central government expected to increase their spending on the commercial construction projects, the analyst expects it to keep supporting the industry growth over the next four to eight quarters in the country.

The Company has established a comprehensive system for risk management and internal controls for all its businesses to manage the risks that it is exposed to. The objective of its risk management framework is to ensure that various risks are identified, measured and mitigated and also that policies, procedures and standards are established to address these risks and ensure a systematic response in the case of crystallization of such risks.

9. CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the companys objectives, projections, estimates, expectations may be forward-looking statements. Actual results may differ materially from those expressed or implied. Important factors that could make difference to the companys operations include economic conditions in which the company operates, change in government regulations, tax laws, statutes and other incidental factors.

For Atal Realtech limited

Sd/-

Vijaygopal Atal Managing Director

Date:05-09-2023 Place: Nashik

Sd/-

Uday Satve

Chief Financial Officer