The purpose of this discussion is to provide an understanding of Womens Next Loungeries Limited financial results and business performance by focusing on changes in certain key measures from year to year.
Management Discussion and Analysis (MD&A) is organized in the following sections:
• Industry and Business Overview.
• Indian Intimate Wear Industry.
• Operational Performance
• Risks and concerns.
• Adequacy of Internal Control System
• Human Resource Development
• Cautionary Statement
Industry and Business Overview:
The company designs, manufactures and markets an extensive range of brassieres and panties viz. teenage wear, women wear and ladies wear etc. The Company product range in exclusive segment includes maternity wear, sport wear, etc. These products are offered in various designs as per customer requirements. The main raw material for our product is man made yarn, which is sourced from domestic markets. The Company based on its experience and its standards, conforms to major specifications and customer requirements.
The man made fiber textile industry is one of the largest organized industries in the country in terms of employment and number of units. Besides, there are a large number of subsidiary industries dependent on this sector, such as those manufacturing machinery, accessories, stores, ancillaries, dyes and chemicals.
Indian Intimate Wear Industry:
India has immense growth potential for the intimate wear industry, which is evident from the entry of large international brands in the Indian market in the last few years. This market is considered to be the fastest developing sector of the fashion industry. The organized Indian innerwear market has almost doubled in the last five years. Key factors contributing to this are, growing income levels of Indians, and the increased awareness about better fits, quality, brands, colors and their changing lifestyles which has restructured the category from just an intimate wear to a fashion clothing item, at least in the urban centers. This changed attitude is also because of changing dress codes and transformations in social mindset. The intimate wear market in India can be classified into super-premium, mid-market, economy and mass market segments. A major share of the intimate wear market is held by the mid-market and economy segments, in terms of both value and volume. Due to the advent of multinational brands in the Indian market and the growth of organized retail, the premium and super–premium segment of intimate wear industry are witnessing higher growth compared to mid or low or economy segments. In view of the current situation, the premium and super premium segments of the industry are advancing following a consumer shift from economy and mid-market segments to the premium segment, while the low and economy segment is gaining from the industry being more organized but between the hardy cotton bras that can almost pass off for a blouse to the variety of fantasy lingerie exists a world of innerwear that is reshaping what till now was called the foundation wear industry. New brands, new specialized segments, and new customers - its all coming together. And the key driver is the woman who has started regarding the ‘foundation garment as a fashion one
During the current period of operation, your company has shown a marked improvement in turnover and net profit.
Turnover of the Company in the financial year is 3876.31 lacs as compared to 5177.44 lacs in previous financial year. Profit after Tax of the Company has increased to 181.64 lacs as compared to 90.41 lacs in previous financial year 2016 17.
Outlook on the Lingerie industry in India
The Loungewear & lingerie industry in India is expected to grow at a CAGR of 10-12 % over the period 2009-2020.
This growth would be led by the super-premium, premium and mid-market segment.
A strong brand image, presence in retail infrastructure and diversifying into new retail formats positions the Company as integrated player in the growing domestic consumption story. With robust economic growth, high disposable income with the end-consumer and the rapid construction of organized retail infrastructure, the Company is confident that it is well placed to take advantage to the growth opportunities in the coming years.
Risk & Concerns:
Your Company outsources the manufacturing of some portion of its products and is therefore dependent on third parties for production of its few products. Our Company depends partly on third party fabricators for performance of the stitching operations although the final assembling and labeling of products so carried out at our manufacturing units.Currently, Our Company has arrangements with various fabricators. Any delay or failure on the part of these fabricators to deliver the products in a timely manner or to meet our quality standards or fabricators to deliver the products in a timely manner or to meet our quality standards or unilateral termination of relationship by them may cause a material adverse affect on our business.
Adequacy of Internal Control System:
The Company has adequate internal control systems for the business processes in respect of all operations, financial reporting, compliance with laws and regulations etc. The management information system forms an effective and sound tool for monitoring and controlling all operating parameters. Regular internal audits ensure that responsibilities are executed effectively. The Audit Committee reviews the adequacy of internal controls on regular basis.
Human Resource Development:
The Company recognizes that its human resource is its strength in realizing its goals and objectives.
The Statement in this Management Discussion and Analysis report, describing the Companys outlook, 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.