INDIAN ECONOMIC OVERVIEW
Strong economic growth in the first quarter of FY 2022-23 helped India
overcome the UK to become the fifth-larg- est economy after it recovered from repeated
waves of COVID-19 pandemic shock. Real GDP in the first quarter of 2022-23 is currently
about 4% higher than its corresponding 2019-20, indicating a strong start for Indias
recovery from the pandemic. Given the release of pent-up demand and the widespread
vaccination coverage, the contact-intensive services sector will probably be the main
driver of development in 2022-2023. Rising employment and substantially increasing private
consumption, supported by rising consumer sentiment, will support GDP growth in the coming
months.
Future capital spending of the government in the economy is expected to
be supported by factors such as tax buoyancy, the streamlined tax system with low rates, a
thorough assessment and rationalization of the tariff structure, and the digitization of
tax filing. In the medium run, increased capital spending on infrastructure and
asset-building projects is set to increase growth multipliers, and with the revival in
monsoon and the Kharif sowing, agriculture is also picking up momentum. The contact-based
services sector has largely demonstrated promise to boost growth by unleashing the pent-up
demand over the period of April-September 2022. The sectors success is being
captured by a number of HFIs (High-Frequency Indicators) that are performing well,
indicating the beginnings of a comeback.
India has emerged as the fastest-growing major economy in the world and
is expected to be one of the top three economic powers in the world over the next 10-15
years, backed by its robust democracy and strong partnerships.
CONSUMER GOODS INDUSTRY IN INDIA
Indias consumer market, with its dramatic increase in demand, rapid
economic growth and rising young technical labor force, makes it an increasingly
interesting FDI destination. Indias economy is domestic consumption-driven by its
population of 1.4 billion. It is the third largest economy in the world in terms of
purchasing power parity, a fact that is increasingly impossible for multinational
companies to ignore. The Indian economy has recovered to pre-pandemic levels, with real
GDP growth in FY 2021-22 at 8.2%, 1% higher than in FY 2019-20. Fast-moving consumer goods
(FMCG) sales are fueling economic expansion, as they increased by 16% in 2021, driving a
nine-year high in consumption-led growth. FMCG is the fourth-largest sector in the Indian
economy, with a market size of US$110 billion in 2020. It is expected to double by 2025.
More than half of the overall revenue in FMCG comes from the urban
segment, but rural markets show the fastest year-over-year growth. Market share is 50% for
Household and Personal Care, followed by Healthcare (31%) and Food and Beverages (19%).
The shift to an organized market, increasing rural consumption and e-commerce are the key
drivers of FMCG growth in India.
Despite its English-speaking, low-cost, and well-educated technical
labor force, India historically has not been a popular location to establish
export-oriented manufacturing. But today, many companies are now making decisions to
invest in manufacturing in India that can both accommodate growing domestic demand and
serve as an export base.
Government Support to Boost Domestic Manufacturing
Indias government recognizes that now is the time to promote
manufacturing FDI. To lure foreign companies to invest in India, the government in October
2021 launched a new scheme called "Gati Shakti" or "Strength and
Speed" to streamline the notoriously bureaucratic and cumbersome processes of
establishing an entity and obtaining the numerous approvals and operating licenses to do
business. Under this program, 16 ministries will be connected through a single digital
platform, providing investors a one-stop solution for approvals.
In October, Prime Minister Narendra Modi approved $1.2 trillion to
boost the program and help speed up infrastructure projects, especially roads, railway
networks, ports and airports.
THE BUSINESS
Urja Global is one of leading consumer goods companies. It has been the
well known name in the batteries, solar and electric vehicles. The Companys contemporary
product portfolio in the domestic market comprises batteries, Solar batteries, E-rickshaw
and E-scooters.
The Company continues to leverage its wide distribution network with a
range of product offerings in the lighting and electrical segment. The Company believes
that the Urja brand is a natural fit to the lighting and electrical category. Company
plans to persist in its efforts to be a significant player in these product segments.
Towards this objective, additional efforts are being put to align distribution to the
needs of this trade. The platform of the Company today is to provide portable power and
lighting - and the products as mentioned above are aligned to that platform. Company
expects to strengthen its presence across these products through increasing value and
volumes in the future.
Over the decades, we are working in the dry cell batteries markets in
the country. The Companys contemporary product portfolio in the domestic market comprises
the following:
• Lithium IOB batteries, automotive batteries, inverter batteries,
solar batteries and e rickshaw batteries under the brand names Urja and I-volt.
• Solar study lamps, LED lartern, Solar Panels, Solar Inverter
Solar Home lighting,.
• Urja Solar Atta Chakki, Solar Water Pumps, Solar Rooftop and
solar system on grid/off grid.
• E-rickshaws and E scooters.
The Company continues to leverage its wide distribution network with a
range of product offerings in the lighting and electrical segment.
The Company believes that the Urja brand is a natural fit to the
lighting and electrical category. Urja, thus, plans to persist in its efforts to be a
significant player in these product segments. Towards this objective, additional efforts
are being put to align distribution to the needs of this trade. The platform of the
Company today is to provide portable power and lighting - and the products as mentioned
above are aligned to that platform. Urja expects to strengthen its presence across these
products through increasing value and volumes in the future. Also, the Company stopped
selling all un-remunerative and low range appliances.
RECHARGEABLE BATTERIES MARKET OUTLOOK
The global rechargeable batteries market was held to be $28.1 billion
in 2021 and projected to reach $49.7 billion by 2030. Rechargeable batteries market is
expected to grow at a CAGR of 6.1% during the forecast period i.e. 2022-2030.
After the batterys power is depleted, a rechargeable battery may
be repeatedly recharged by connecting its terminals to a DC current. Rechargeable
batteries offer several uses for each cell and are an excellent long-term investment in
terms of money spent on rechargeable gadgets.
Rechargeable batteries are typically a more dependable, environmentally
friendly, and long-lasting alternative to non-rechargeable batteries. Non-rechargeable
batteries generate current through a chemical reaction in which the batterys
reactive anode is consumed.
The recent report on "Global Rechargeable Battery Market"
offered by Analytics Market Research, comprises of a comprehensive investigation into the
geographical landscape, industry size along with the revenue estimation of the business.
Additionally, the report also highlights the challenges impeding market growth and
expansion strategies employed by leading companies in the "Rechargeable Battery
Market".
An exhaustive competition analysis that covers insightful data on
industry leaders is intended to help potential market entrants and existing players in
competition with the right direction to arrive at their decisions. Market structure
analysis discusses in detail Rechargeable Battery companies with their profiles, revenue
shares in market, comprehensive portfolio of their offerings, networking and distribution
strategies, regional market footprints, and much more.
SOLAR- RENEWABLE ENERGY TARGET
In 2022, the amount of renewable energy capacity is anticipated to grow
by more than 8% and reach about 320 GW. "However, unless new policies are implemented
rapidly, growth remains stable in 2023 because solar PV expansion cannot fully compensate
for lower hydropower and steady year-on-year wind additions", the report read.
The growing emphasis on energy security, particularly in the European
Union, is also sparking an unparalleled legislative push towards boosting energy
efficiency and renewables, even as looming market uncertainties exacerbate obstacles.
Ultimately, whether new and stronger rules will be presented and implemented in the
upcoming six months will determine the prediction of renewable markets for 2023 and
beyond, the report stated.
ELECTRIC VEHICLES NEED
In fiscal year 22-23, Indias electric car sales surpassed one million
units. According to the most recent figures from the Society of Manufacturers of Electric
Vehicles (SMEV), the whole EV industry sold 1,152,021 units in FY 2023, including e-buses,
e-cars, e-three-wheelers, and e-two-wheelers. This is a 58% increase over the 726,861
units sold in FY21-22.The industry sold 726,976 high-speed e-two wheelers, accounting for
62% of the EV pie, while adoption declined month on month, "finishing with an annual
shortfall of more than 25% above the minimal objective set by Niti Aayog," according
to a statement from SMEV.
In fiscal year 22-23, Indias electric car sales surpassed one million
units. According to the most recent figures from the Society of Manufacturers of Electric
Vehicles (SMEV), the whole EV industry sold 1,152,021 units in FY 2023, including e-buses,
e-cars, e-three-wheelers, and e-two-wheelers. This is a 58% increase over the 726,861
units sold in FY21-22.The industry sold 726,976 high-speed e-two wheelers, accounting for
62% of the EV pie, while adoption declined month on month, "finishing with an annual
shortfall of more than 25% above the minimal objective set by Niti Aayog," according
to a statement from SMEV.
Apart from that, the two-wheeler sales tally also comprised 120,000
low-speed e-scooters, 285,443 low-speed e-rickshaws, and roughly 50,000 low-speed
e-cycles, totaling 846,976 units in FY23.This is a significant increase from the 27,888
electric two-wheelers sold in FY17 and over three times the 328,000 units sold in FY22. In
FY23, electric three-wheelers accounted for 34% of the EV market, with 401,841 units sold.
Electric four wheelers sold 47,217 units at 4%, while electric buses sold 1904 units at
0.16
However, industry has expressed concern over the suspension of FAME2
subsidies for businesses that do not fulfill localization requirements, claiming that it
has hurt sales. According to the SMEV statement, the momentum in electric two-wheeler
adoption "fell after the festive season not because of consumer demand but because of
the sudden withholding of more than the Rs 1,200 crore subsidy already passed on to
customers by the majority of OEMs on the pretext of delay in localization."
"Another Rs 400 crore of premium-end OEMs has got delayed owing to the charge of
under-invoicing to avoid FAME norms."
Currently, 16 companies are waiting for this impasse to be resolved.
"While all earlier schemes since 2015 had limited influence on EV adoption, the
amended FAME2 had a major effect on e-two wheeler adoption since it reduced their pricing
by roughly 35%," said Sohinder Gill, director general, SMEV. This began to draw the
component supply chain, which had hitherto eschewed having to do with electric
two-wheelers due to extremely low volumes. Suppliers began lining up to OEMs in late 2021
to demonstrate their readiness to create EV components.
Most of these suppliers took the standard 12 to 18 months to localise,
and most of them have already begun to build significant capacity.
DIGITIZATION OF HEALTHCARE
Early in the COVID-19 pandemic, telehealth usage surged as consumers
and providers sought ways to safely access and deliver healthcare. In April 2020, overall
telehealth utilization for office visits and outpatient care was 78 times higher than in
February 2020.
This step-change, borne out of necessity, was enabled by these factors:
1) Increased consumer willingness to use telehealth,
2) Increased provider willingness to use telehealth,
3) Regulatory changes enabling greater access and reimbursement.
During the tragedy of the pandemic, telehealth offered a bridge to
care, and now offers a chance to reinvent virtual and hybrid virtual/in person care
models, with a goal of improved healthcare access, outcomes, and affordability.
A year ago, we estimated that up to $250 billion of US healthcare spend
could potentially be shifted to virtual or virtually enabled care. Approaching this
potential level of virtual health is not a foregone conclusion. It would likely require
sustained consumer and clinician adoption and accelerated redesign of care pathways to
incorporate virtual modalities.
As of July 2021, we step back to review the progress of telehealth
since the initial COVID-19 spike and to assess implications for telehealth and virtual
health more broadly going forward.
RISKS AND CONCERNS
The only foreseeable risk in this category seems to be the ability to
cope up with the dynamics of an evolving market and get the first mover advantage. This
needs to be tackled through a range of quality product offerings at competitive prices.
At Urja, the risk management framework sets guidelines for operations
so that the Company can continue on the path of sustainable change. These risks are
monitored for changes in their exposure and are reported during the course of a year.
• Urja continuously monitors the global environment, works with
advisors, partners and governments. Our well-diversified business across geographies and
industry verticals ensure sustainable business growth.
• The company has a price escalation clause with its major clients
for compensating it with any price volatility. However, the chances of lag in price rise
in input and finished goods always remain.
• The Company places utmost importance on ensuring the safety of
its employees, visitors to our premises and the communities we operate in. The Company has
been achieving continuous improvement in safety performance through a combination of
systems and processes as well as co-operation and support of all employees. The Company
has robust training programs and reporting mechanisms in place designed to ensure
regulatory compliance and mitigate the risks associated with workplace injury and conducts
regular safety audits. The Company has developed programs to promote a healthy and safe
workplace, as well as progressive employment policies focused on the well-being of our
employees who work in it. These policies and programs are reviewed regularly by the Board
of Directors.
• The Company has been operating in a competitive environment
since its inception. The Company has deep domain knowledge, state of art manufacturing
facilities, a skilled workforce, delivery capabilities, efficient sales force, and
economies of scale to help retain its competitive positioning amongst peers.
Succession plans have been identified for key roles including the depth
of management talent throughout the Company and its subsidiaries. We invest heavily in
"hiring right" and "talent development & engagement". This helps
provide fulfilling careers to members in Urja.
• Urja has a dedicated in-house compliance team that manages these
operations. We have knowledgeable consultants across the countries who support us in
adhering to country-specific compliance requirements. Further, the Company has invested in
compliance systems and processes to ensure that all its functions and units are aware of
the laws and regulations to comply with and that adequate Monitoring mechanisms are put in
place to ensure compliance. Urja appoints local business leaders and management teams who
bring a strong understanding of the local operating environment and strong customer
relationships.
INTERNAL CONTROL SYSTEMS
The Company has adequate internal control procedures commensurate with
its size and nature of business. Their objective is to ensure efficient usage and
protection of the Companys resources, accuracy in financial reporting and due compliance
of statutes and procedures. The existing system provides for structured work instructions
and clearly laid down procedures for authorization and approval for the purchase and sale
of goods and services. It also provides for reserved responsibility of custodial control
with identified personnel, and use of computerized systems to ensure controls at source.
The Company has had a full-fledged in house Internal Audit Department
manned by trained professionals till March 31, 2023. The Audit Committee of the Board of
Directors, Statutory Auditors and the Business Heads are periodically apprised Audit plays
a key role in providing assurance to the Board actions taken by the management are
presented to the Audit Committee of the Board. The pre audit and post audit checks and
reviews are being carried out to ensure follow up on the observations made by the audit
teams.
The Audit Committee of the Board, in its periodic meetings, reviews the
Internal Audit reports, the progress in implementation of their recommendations and the
adequacy of internal control systems. The Company has a well-documented Risk Management
System, which is reviewed by an active Steering Committee appointed by the Board of
Directors. The risk registrar does identify a few risks, which are routine in nature and
none of which present any significant impact. There is a mitigation system in place which
addresses these risks as part of the routine management process.
Based on its evaluation (as defined in Section 177 of Companies Act
2013 and Regulation 18 of SEBI Regulations, 2015), the audit committee has concluded that,
as of March 31, 2023, internal financial controls were adequate and operating effectively.
HUMAN RESOURCES
People power is one of the pillars of success at Urja. The Company
employs nearly individuals across its various plants and branch locations, who share a
passion for excellence. The key attributes of human capital at Urja are a rich knowledge
base, expertise and experience.
The employee-management relations remained cordial throughout 2022-23.
The human resource management system at Urja puts emphasis on rewarding merit based
performance and raising the skill level of employees.
COMPANYS PERFORMANCE REVIEWS
From an organisational standpoint, Urja Global Limited views FY 2022-23
as an eventful and somewhat challenging year. During 2022-23, the category turnover was at
Rs. 4038.45 Lakhs, lower than the previous year. However, the growth remained high in
comparison to the industry, partially due to high volume in sales. High inflation also
impacted demand during the latter part of the year. The segment registered net profit
before tax Rs.179.02 Lakhs during the year. The category is expected to grow strongly in
the coming years with expansion of distribution and product range.
We have launched out E-scooter with two variants i.e. E-life and E-zess
in October, 2021 to reduce vehicular pollution. M/s Urja Digital World Limited, a
wholly-owned subsidiary of Urja Global Limited was incorporated on 2020, to carry out the
online business of E- Urja, E - vehicles, E - connect, E-health & E-education, etc. at
Urja Kendras. Through this initiative, the Company is looking to promote sales of
Electric Vehicles. With declining costs and improving performance, LED products have been
seeing increased adoption for general illumination applications. This is a positive
development in terms of energy consumption, as LEDs use significantly less electricity per
lumen produced than many traditional lighting technologies.
Solar power in India at the current level is already cheaper than
electricity generated through diesel. Support from various Central and States governments
for the solar power industry is continuously increasing.
FINANCIAL PERFORMANCE
During the year 2022-23 under review, the Companys Net Sales were Rs.
3918.29/- Lakhs as against Rs.6238.75/-Lakhs last year. Net Profit was Rs. 134.09/- as
against Rs. 66.20/-Lakhs last year.
• The Revenue and Expenses have decreased by Rs. 2337.62/- Lakhs
and Rs. 2428.31/-Lakhs respectively thereby registering a decline of 36.66% and 38.61%
respectively while Net Income of the Company has increased by Rs. 90.69/-Lakhs i.e. 50.65%
in the year 2022-23.
| PARTICULARS |
FOR THE YEAR ENDED 31.03.2023 |
FOR THE YEAR ENDED 31.03.2022 |
| Total Revenue |
4038.45 |
6376.07 |
| Total Expenses |
3859.43 |
6287.74 |
| Net Income (l-Il) |
179.02 |
88.33 |
• Similarly, the Current Assets and Current Liabilities of the
Company has decreased by Rs. 4042.82/-Lakhs and Rs. 1493.61/-Lakhs for the year 2022-23,
thereby registering a growth and decline of 45.60 and 33.07% respectively.
FINANCIAL PERFORMANCE
We have launched out E-scooter with two variants i.e. E-life and E-zess
in October, 2021 to reduce vehicular pollution. M/s Urja Digital World Limited, a
wholly-owned subsidiary of Urja Global Limited was incorporated on 2020, to carry out the
online business of E- Urja, E - vehicles, E - connect, E-health & E-education, etc. at
Urja Kendras. Through this initiative, the Company is looking to promote sales of
Electric Vehicles. With declining costs and improving performance, LED products have been
seeing increased adoption for general illumination applications. This is a positive
development in terms of energy consumption, as LEDs use significantly less electricity per
lumen produced than many traditional lighting technologies.
|
On behalf of the Board of Directors URJA GLOBAL LIMITED |
|
sd/- |
|
MOHAN JAGDISH AGARWAL |
|
MANAGING DIRECTOR |
|
DIN: 07627568 |
|
sd/- |
|
YOGESH KUMAR GOYAL |
|
WHOLE TIME DIRECTOR |
|
DIN:01644763 |
| Date: 02.05.2023 |
|
| Place: New Delhi |
|
+91-9892691696
