ANNUAL OVERVIEW AND OUTLOOK
The Asian Development Bank (ADB) projects growth in Indias gross domestic product
(GDP) to moderate to 6.4% in fiscal year (FY) 2023 ending on 31 March 2024 and rise to
6.7% in FY2024, driven by private consumption and private investment on the back of
government policies to improve transport infrastructure, logistics, and the business
ecosystem. The projection is part of the latest edition of ADBs flagship economic
publication, Asian Development Outlook (ADO) April 2023, released today. The growth
moderation for India in FY2023 is premised on an ongoing global economic slowdown, tight
monetary conditions, and elevated oil prices. However, FY2024 is expected to see faster
growth in investment, thanks to supportive government policies and sound macroeconomic
fundamentals, lower nonperforming loans in banks, and significant corporate deleveraging
that will enhance bank lending, according to ADO April 2023. “Despite the global
slowdown, Indias economic growth rate is stronger than in many peer economies and
reflects relatively robust domestic consumption and lesser dependence on global
demand,” said ADB Country Director for India Takeo Konishi. “The Government of
Indias strong infrastructure push under the Prime Ministers Gati Shakti (National Master
Plan for Multimodal Connectivity) initiative, logistics development, and industrial
corridor development will contribute significantly to raising industrial competitiveness
and boosting future growth.” Improving labor market conditions and consumer
confidence will drive growth in private consumption. The central governments commitment
to significantly increase capital expenditure in FY2023, despite targeting a lower fiscal
deficit of 5.9% of GDP, will also spur demand. Helped by recovery in tourism and other
contact services, the services sector will grow strongly in FY2023 and FY2024 as the
impact of COVID-19 wanes. However, manufacturing growth in FY2023 is expected to be tamped
down by a weak global demand, but it will likely improve in FY2024. Recent announcements
to boost agricultural productivity, such as setting up digital services for crop planning
and support for agriculture startups will be important in sustaining agriculture growth in
the medium term. Inflation will likely moderate to 5% in FY2023, assuming moderation in
oil and food prices, and slow further to 4.5% in FY2024 as inflationary pressures subside.
In tandem, monetary policy in FY2023 is expected to be tighter as core inflation persists,
while becoming more accommodative in FY2024. The current account deficit is projected to
decline to 2.2% of GDP in FY2023 and 1.9% in FY2024. Growth in goods exports is forecast
to moderate in FY2023 before improving in 2024, as production-linked incentive schemes and
efforts to improve the business environment, such as streamlined labor regulations,
improve performance in electronics and other areas of manufacturing growth. Services
exports growth has been robust and is expected to continue to strengthen Indias overall
balance of payments position.
INDUSTRY OVERVIEW
The Indian stock market largely remained an outperformer, sustaining its strong
performance from last year despite the various challenges. However, the year ended flat
for both the indices. Nifty 50 ended with (0.6)% return for FY23 while the Sensex ended
the year with minor growth of 0.7%. The resilient performance reflects the strong earning
profile of Indian corporates and investors belief in Indias growth story. The strong
performance of the Indian stock market was achieved despite a selloff from foreign
institutional investors (FIIs) during FY23, when they liquidated stocks worth
approximately C2.4 trillion in the cash segment. This was offset by Domestic Institutional
investors (DIIs) who remained net buyers, purchasing equities worth approximately C2.4
trillion. The growth in SIP also remained robust during the year, with a surge in new
account openings and significant fund inflow.
OPPORTUNITIES & THREATS
A strong, regulated, and efficient capital market is essential for a vibrant financial
system and sustainable economic development of a nation. The Indian financial system has
always encouraged a robust capital market for supporting the investment requirements of
individuals and funding requirements of companies. Capital markets provide a platform for
wealth creation in the economy, and India is one of the fastest-growing wealth management
markets in the world. The Indian financial markets have been witnessing increasing growth
and are becoming more mature and modernized. At the same time, markets are also getting
increasingly multifaceted due to the emergence of new products, technology enabled
processes and rising global integration. The Government of India has taken numerous
measures to usher in financial and regulatory reforms in the primary and secondary market.
Over the years, the growth of the Indian capital market has enabled the participation of
citizens in nation-building. Easy and improved access to digital financial services has
resulted in increased retail participation of investors in the capital market, which also
calls for a robust framework for investor protection, education and awareness. It is
imperative to strengthen the awareness of investors. Thus, the Securities and Exchange
Board of India (SEBI) and Investor Education and Protection Fund Authority (IEPFA) have
been working towards enhancing the level of financial literacy across the nation. As India
marches into the Amrit Kaal, the
Indian capital markets will be well poised to support Indias growth story. In this
growth, SMEs will also have a big role to play, and we need to empower them by providing
easy and low-cost access to capital through our capital market. Owing to the robust
structural and institutional reforms taken by the Government of India, the Indian economy
successfully navigated the pandemic and managed the global headwinds and volatile
geo-political situation much better than many economies of the world. As we come out of
this challenging phase, private sector enterprises in India are eager to expand their
businesses. Capital markets role in meeting corporate Indias long-term funding
requirements assumes huge significance. Reserve Bank of India (RBI) has said that domestic
economic activity does face challenges from an uninspiring global outlook going forward,
but resilient domestic macroeconomic and financial conditions, expected dividends from
past reforms and new growth opportunities from global geo-economic shifts place India at
an advantageous position in the current fiscal.
RISKS AND CONCERNS
V B Industries Ltd. (VBIL) has exposures in various line of business. VBIL are exposed
to specific risks that are particular to their respective businesses and the environments
within which they operate, including market risk, competition risk, credit risk, liquidity
and interest rate risk, operational risk, information security risks, regulatory risk and
macro-economic risks. The level and degree of each risk varies depending upon the nature
of activity undertaken by them.
MARKET RISK
The Company has quoted investments which are exposed to fluctuations in stock prices.
VBIL continuously monitors market exposure in equity and, in appropriate cases, also uses
various derivative instruments as a hedging mechanism to limit volatility.
LIQUIDITY AND INTEREST RATE RISK
The Company is exposed to liquidity risk principally, because of lending and investment
for periods which may differ from those of its funding sources. Management team actively
manages asset liability positions in accordance with the overall guidelines laid down by
various regulators. The Company may be impacted by volatility in interest rates in India
which could cause its margins to decline and profitability to shrink. The success of the
Companys business depends significantly on interest income from its operations. It is
exposed to interest rate risk, both as a result of lending at fixed interest rates and for
reset periods which may differ from those of its funding sources. Interest rates are
highly sensitive to many factors beyond the Companys control, including the monetary
policies of the RBI, deregulation of the financial sector in India, domestic and
international economic and political conditions and, inflation. As a result, interest
rates in India have historically experienced a relatively high degree of volatility. The
Company seeks to match its interest rate positions of assets and liabilities to minimize
interest rate risk. However, there can be no assurance that significant interest rate
movements will not have an adverse effect on its financial position.
HUMAN RESOURCE DEVELOPMENT
The Company recognizes that its success is deeply embedded in the success of its human
capital. During 2022-23, the Company continued to strengthen its HR processes in line with
its objective of creating an inspired workforce. The employee engagement initiatives
included placing greater emphasis on learning and development, launching leadership
development programme, introducing internal communication, providing opportunities to
staff to seek inspirational roles through internal job postings, streamlining the
Performance Management System, making the compensation structure more competitive and
streamlining the performance-link rewards and incentives.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable
to the Company.
COMPLIANCE
The Compliance function of the Company is responsible for independently ensuring that
operating and business units comply with regulatory and internal guidelines. The
Compliance Department of the Company continues to play a pivotal role in ensuring
implementation of compliance functions in accordance with the directives issued by
regulators, the Companys Board of Directors and the Companys Compliance Policy. The
Audit Committee of the Board reviews the performance of the Compliance Department and the
status of compliance with regulatory/internal guidelines on a periodic basis.
The Company has complied with all requirements of regulatory authorities. No
penalties/strictures were imposed on the Company by stock exchanges or SEBI or any
statutory authority on any matter related to capital market during the last three years.
| Kolkata, May 18, 2023 |
By order of the Board |
|
For V B Industries Limited |
|
S/d- |
| Registered Office: |
Gwal Das Vyas |
| P-27, Princep Street, 3rd Floor |
DIN: 01319377 |
| Kolkata 700 072 |
Chairman & Managing Director |
+91-9892691696
