1. BUSINESS OVERVIEW
The global stationery products market size to be valued at USD 128.5 billion by 2025
and is expected to grow at a compound annual growth rate (CAGR) of 5.1% during the
forecast period. Growing literacy rates across the globe and an increasing number of youth
inclining towards higher education are among the prominent factors for market growth.
Furthermore, the rapid increase in the number of start-ups is propelling market growth.
According to a report by NASSCOM, more than 1200 startups came into existence in 2018.
Thus, increasing employment in these sectors is impacting market growth significantly.
Government initiatives have led to an increase in the number of schools and colleges in
rural as well as urban areas, which is directly impacting market growth.
The global education industry is anticipated to witness significant growth in the near
future, thus fueling the market growth in the forecast period. Increasing brand awareness
and disposable income among the consumers are driving the market for luxury pens, which,
in turn, is providing an upthrust to the global industry in the forecast period.
India Stationery Market has registered substantial growth in the past few years
owing to the growing urban population, changing lifestyle, and increasing demand for
stationery products in the private and public sector among with growing government
initiatives in improving education system such as Sarva Shiksha Abhiyan (SSA), Rashtriya
Madhyamik Shiksha Abhiyan (RMSA). Moreover, the rising brand awareness, increasing adult
literacy rate, and the growing number of start-ups would further boost the demand for the
stationery market in India.
According to 6wresearch, the India Stationery Market size is expected to grow during
2020-2026. In India, the Stationery Market is projected to register a decline in economic
growth during the first quarter of 2020 due to the coronavirus pandemic which has a worse
impact on worldwide business. However, during the second half of 2020-2026, the Stationery
Market in India is anticipated to recover with healthy growth in the economy. In
application, the education segment is leading major revenue in the stationery market share
in India on account of growing educational structure, providing quality education,
promoting equality in education, increasing employment in the education sector, and
surging number of educational institutes in the country.
Company Profile and Performance of Stationery Industry during 2022-23
Our Company primarily deals in all kinds of (a) stationery products viz. artistic
materials, hobby colors, scholastic colors, scholastic stationery, office products,
drawing instruments, writing instruments, office stationery, adhesives, notebooks, office
supplies and writing instruments, books, pens, pencils, erasers, files, copier paper, bags
and bottles; (b) procuring paper pulp and supplying the same to paper mills and (c)
procuring bag fabric and supplying it to the other bag manufacturers and also using the
same for manufacturing our products (school and office bags). These stationery products
are essentially used by school going children and offices as a part of their stationary
requirements. On the other hand, paper pulp is the key raw material for the manufacturing
of wide variety of paper. We can further classify our range of stationary products into
(i) school and education products; (ii) fine art and hobby products; and (iii) office
products.
We sell our products in the overseas markets as well in countries like Saudi Arabia,
Kuwait, Qatar, Bahrain, UAE, Oman, and Mauritius, Africa, Kenya, Tanzania to cater to the
demands of overseas market, we participate in various exhibitions, personal interaction
and meeting with the customers, mass mailing, circulation of catalogues by way of social
media, etc. to market our products.
Domestic Sales during F.Y 2022-23 –
For the period ended March, 2023, the Company doesnot have any business, however
directors are focusing on the new business plans.
Export –
For the period ended March, 2023, Company doesnt have any export income.
2. INDUSTRY STRUCTURES & DEVELOPMENT:
The India school stationery supplies market is expected to continue its moderate growth
during the forecast period (2021-2026). Keeping in mind the uncertainties of COVID-19, we
are continuously tracking and evaluating the direct as well as the indirect influence of
the pandemic.
The Indian stationery industry is expected to hold great growth potential as the school
and college going Population of the nation is on a rise. Nearly 22-24 crore students
studying in schools and colleges, require notebooks and other stationery materials.
Further, the office going population is also one of the biggest contributors to the
sector. With the rise in the economic prosperity of the nation, more and more jobs are
expected to be created in the days ahead, thus in turn would increase the demand of the
office stationery and would contribute significantly in the growth of the sector.
The Indian stationery industry is highly scattered and is largely dominated by the
unorganized sector and the situation is quite alarming for the organized players industry.
Factors like lack of modern production facilities, unorganized nature of functioning,
marginal demands, government policies and international competition are largely
contributing to the slow growth of the organized stationery industry in India.
However, the industry is now showing signs of organized growth, as a result of
tremendous increase in the demand for the stationery products in India. This demand
can be attributed to the entry of a large number of international brands in India. The
Indian stationery industry is largely shared by the educational and office stationery
products. Particularly in the school stationery category, the percentage of schoolbooks
captures the bulk of the market. The national market for syllabus-based books is estimated
at Rs.10 billion and is growing at 20 per cent per annum. Relatively, other departments
from the stationery industry generate more or less equal percentage of growth.
Increasing number of schools and offices improved standard of living as well as shift
in focus from inexpensive to premium quality products on account of rapidly growing
economy are some of the crucial Factors which would drive the demand for stationery
products in India over the next few years.
The Company also introduced products in categories like Pens and Notebooks to
strengthen its market presence
3. OPPORTUNITIES AND THREATS:
Opportunity - We believe that the following are our primary competitive strengths:
According to Trends, Drive, and a lot of Challenges according to the market conditions
due to rising in the E-commerce business in the stationary sector. It creates a new
opportunity for the key player in the market for the growth of the business and it will
help the business grow to the online sale of the stationery product on the online
platform. According to the ASSOCHAM, India is leading countries such as Russia and Brazil
in the million users of the internet user searching for the online stationery product.
Online shopping of books and novels generates great revenue for the Indian market of
stationery. The e-commerce business expands and creates revenue for million.
Online shopping such as books and novels major share getting from online shopping. The
government sector expenditures the educational sector so that the literacy rates will
increase its direct impact on the stationery items or products its generated the
revenue while enrolment of the new students in the educational sector.
| Threats; |
| Pandemic (COVID -19), |
| Bann on Paper Import |
| Trade relationships with China under strain |
There is a lot of competition in the stationery market basically the local player is
unorganized there selling low-quality products at a low rate to the customers.
Business cyclicality risk: The Companys primary business segment includes products
which have a higher acceptance in schools and colleges. Thus a major chunk of the revenue
generated is exposed to the cyclicality risk as demand for the products peak during the
beginning of a new school season while demand remains flat for the rest of the year. Thus
any set back on the part of the Company during the peak period could seriously dent the
companys profit.
Mitigation: The Company diligently tracks the school session timings across various
parts of the country and accordingly launches new products, plans production and re-stocks
the distribution channel and the retailers. Thus the company not only ensures adequate
supply of its product during the peak period but also ensures that its product is within
the hands reach. Further the Company has also enhanced its presence in the office
stationery segment over the years, which have a round the year steady demand, thus
reducing its dependence on only one segment.
Raw material risk: Non-timely availability of raw materials may impact the production
and which in turn may have an impact on the sales and profitability of the Company. At the
same time high cost of raw materials may also impact the bottom-line.
Lack of awareness - Due to lack of desire and unawareness about the products, the
consumer is used to buying whatever is available at the local stationery shops.
Competent local players - Indian local players hold the major share in the stationery
market, which is a challenge for Indian organized players.
Price variations - Local players, without any proper billing, sell products at cheap
prices, whereas, organized players have to go through proper billing and taxation, which
creates a gap between the prices of the two sectors.
Low cost products- The stationery products are low cost products and the advertising
spending is very low in this industry; it is difficult to attract the customers to buy a
particular product.
4. OUTLOOK:
Indian economy is expected to grow better this year. With lower inflation, lower bank
interest rates and expected normal monsoon, outlook for automotive industry appears to be
satisfactory. Although, global economy continues to struggle, opportunities for business
are significant considering current low market penetration. With focused customer service,
the outlook for the Company appears satisfactory.
With the objective of delivering profitable growth, the companies expect to leverage on
the favorable demand environment and pursue market share improvements. Further, the
Company continues to expand the international business with its existing customer base.
5. RISK AND CONCERNS:
The Company has laid down well-structured procedures for monitoring the risk management
plan and implementing the risk mitigation measures. The risks are broadly classified into
strategic risks, operational risks, financial risks and statutory compliance risks. These
risks are rated based on factors such as past year experience, probability of occurrence,
probability of non-detection and its impact on business. The top management reviews the
strategic risks, the risks with high probability and high impact every quarter and
presents its report along with risk mitigation plan to the Board of Directors on
half-yearly basis. The strategic risks are taken into consideration in the annual planning
process with their mitigation plan. Other risks are covered as part of internal audit
process and presented to the Audit Committee every quarter. The business processes risks
and the related controls are subjected to internal audit and reviewed on a quarterly
basis. The risk ratings are revalidated with the top management as part of the internal
audit process every quarter. The overall re-assessment of risks at company level is
carried out.
6. QUALITY AND QUALITY MANAGEMENT SYSTEMS
Your Company is continuing its focus on improvements to the quality systems at all
levels through Total Employee Involvement with a view to provide higher customer
satisfaction. Your company continues to closely monitor and focus on various cost
reduction and cost control initiatives to achieve planned targets during the year.
7. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has adequate systems of internal control meant to ensure proper accounting
controls, monitoring cost- cutting measures, efficiency of operation and protecting assets
from their unauthorized use. The Internal Audit department of the Company reviews control
measures in the management of risks and opportunities and ensures adherence to operating
guidelines and compliance with regard to regulatory and legal requirements.
The Companys budgetary control system aims to ensure adequate control on the
expenditure. The management reviews the actual performance with reference to the
predetermined norms and standard on monthly basis. The Company has to work hard to
maintain its market share without compromising on the quality of its products.
8. DISCUSSION OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
Financial highlights with respect to operational performance:
|
(Rs. In Lakhs except EPS) |
|
| Particular |
As on 31st March, 2023 |
As on 31st March, 2022 |
| Total Income |
0 |
513.82 |
| Profit / (Loss) Before Tax |
(1,253.21) |
(952.43) |
| Profit/ (Loss) After Tax |
(1,253.45) |
(951.39) |
| EPS |
(20.92) |
(15.88) |
9. HUMAN RESOURCES MANAGEMENT:
Human Resource base is the greatest asset of the Company. Shortages and challenges of
retaining skilled manpower have to be addressed to on a continual basis. The Company
provides necessary training to all its employees and equips them to manage critical
business processes to face the challenge of competitive Global market.
10. CAUTIONARY STATEMENT:
Statement in this Management Discussion and Analysis report, describing the Companys
objectives projections, estimates, expectations or predictions may be "Forward
looking Statements" within the meaning of applicable securities laws or regulations.
Actual results could differ materially from those expressed or implied. Important factors
that could make a difference to the companys operations include global and Indian
demand-supply conditions, cyclical demand and pricing in the Companys principal markets
raw material cost and availability, changes in the Government regulations tax regimes,
economic development within India and the countries within which the Company conducts
business and other factors such as litigation and industrial relations.
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