Global economic overview
The global economy grew an estimated 6.1% in 2021 compared to a
de-growth of 3.3% in 2020.
The global economic recovery is attributed to accelerated vaccine
rollout across 4.4 billion people, around 56% of the global population (single dose),
increased travel and consumption.
Global FDI reported an increase from USD 929 billion in 2020 to an
estimated USD 1.65 trillion in 2021.
However, the global economy and recovery was affected by prohibitive
shipping freight rates, a shortage of shipping containers and semiconductor chips in 2021.
Infiation was at its highest since 2022, especially in the advanced economies, catalysed
by a run up in commodity prices. Some emerging and developing economies were positioned to
withdraw policy support to contain inflation even as the economic recovery was still
incomplete.
The global economy is estimated to grow at a modest 2.6% in 2022
following the Russia-Ukraine crisis. A higher interest rate environment could affect
emerging markets and developing economies with large foreign currency borrowings and
external financing needs in 2022.
| Regional growth (%) |
2021 |
2020 |
| World output |
6.1 |
(3.3) |
| Advanced economies |
5.0 |
(4.9) |
| Emerging and developing economies |
6.3 |
(2.4) |
(Source: IMF, World Bank, UNCTAD)
Performance of major economies
Indian economic overview
The Indian economy reported an attractive recovery in FY 2021-22, its
GDP rebounding from a de-growth of 7.3% in FY 2020-21 to a growth of 8.7% in FY 2021-22.
By the close of FY 2021-22, India was among the six largest global economies, its economic
growth rate was the fastest among major economies (except China), its population at around
1.40 billion is the second most populous in the world and its rural under-consumed
population is arguably the largest in the world.
Y-o-Y growth of the Indian economy
|
FY19 |
FY20 |
FY21 |
FY22 |
| Real GDP growth (%) |
6.1 |
4.2 |
(7.3) |
8.7 |
| Growth of the Indian economy, FY 2021-22 |
|
|
|
|
|
Q1, FY22 |
Q2, FY22 |
Q3, FY22 |
Q4, FY22 |
| Real GDP growth (%) |
20.1 |
8.4 |
5.4 |
4.1 |
The Indian economy was affected by the second wave of the pandemic that
affected economic growth towards the fag end of the previous financial year and across the
first quarter of the financial year under review. The result is that after a growth of
1.6% in the last quarter of FY 2020-21, the Indian economy grew 20.1% in the first quarter
of FY 2021-22 due to the relatively small economic base during the corresponding period of
the previous year. India?s monsoon was abundant in 2021 as the country received
99.32% of a normal monsoon, lower though than in the previous year. The estimated
production of rice and pulses recorded volumes of 127.93 million tonnes and 26.96 million
tonnes respectively. The total oilseeds production of the country recorded a volume of
371.47 million tonnes. Moreover, based on the spatial and temporal distribution of the
2021 monsoon rainfall, the agricultural gross value added (GVA) growth in FY 2021-22 is
anticipated to be 3-3.5%. The country?s manufacturing sector grew an estimated 12.5%,
the agriculture sector grew by 3.9%, mining and quarrying grew by 14.3%, construction grew
by 10.7% and electricity, gas and water supply grew by 8.5% in FY 2021-22.
There were positive features of the Indian economy during the year
under review. India attracted the highest annual FDI inflow of USD 83.57 billon in FY
2021-22, a validation of global investing confidence in India?s growth story. The
government approved 100% FDI for insurance intermediaries and increased FDI limit in the
insurance sector from 49% to 74% in the Union Budget FY 2021-22.
India surpassed the RS 88,000 crore target set for asset monetization
in FY 2021-22, raising over RS 97,000 crore with roads, power, coal, mining and minerals
accounting for a large chunk of the transactions, following this the Indian government
launched a four year RS 6 lakh crore asset monetization plan.
In 2021, India was the largest recipient of global remittances. The
country received USD 87 billion during 2021, with the US being the largest source (20%).
India?s foreign exchange reserves stood at an all-time high of USD 642.45 billion as
on 3rd September, 2021, crossing USD 600 billion in forex reserves for the
first time.
India?s currency weakened 3.59% from RS 73.28 to RS 75.91 to a US
dollar through FY 2021-22. The consumer price index (CPI) of India stood at an estimated
5.3% in FY 2021-22. India reported improving Goods and Services Tax (GST) collections
month-on-month in the second half of FY 2021-22 following the relaxation of the lockdown,
validating the consumption-driven improvement in the economy. The country recorded its
all-time highest GST collections in March 2022 standing at RS 1.42 lakh crore, which is
15% higher than the corresponding period in 2021.
India ranked 62 in the 2020 World Bank?s Ease of Doing Business
ranking. The country received positive FPIs worth RS 51,000 crore in 2021 as the country
ranked fifth among the world?s top leading stock markets with a market capitalization
of USD 3.21 trillion in March 2022.
The fiscal deficit was estimated at ~RS 15.91 trillion for the year
ending 31st March, 2022 on account of a higher government expenditure during
the year under review. India?s per capita income was estimated to have increased
16.28% from RS 1.29 lakh in FY 2020-21 to RS 1.50 lakh in FY 2021-22 following a
relaxation in lockdown and increased vaccine rollout.
India?s tax collections increased to a record RS 27.07 lakh crore
in FY 2021-22 compared with a budget estimate of RS 22.17 lakh crore. While direct taxes
increased 49%, indirect tax collections increased 30%. The tax-to-GDP ratio jumped from
10.3% in FY 2020-21 to 11.7% in FY 2021-22, the highest since 1999.
Retail inflation in March at 6.95% was above the RBI?s tolerance
level of 6% but fuel prices played no part in this surge. Retail inflation spiked to a
17-month high in March 2022, above the upper limit of the RBI?s tolerance band for
the third straight month
(Source: Economic Times, IMF, World Bank, EIU, Business Standard,
McKinsey, SANDRP, Times of India, Livemint, InvestIndia.org, Indian Express, NDTV, Asian
Development Bank)
Global hydraulic components industry review
The global hydraulic components market was estimated at USD 62.7
billion in 2021, increasing at a CAGR of 4% to reach USD 88.4 billion by 2027. This demand
is driven by the construction and mining industry for hydraulic components due to their
safety and efficiency. The hydraulic components market in North America is expected to
expand on account of a growing use of automated and mechanized agriculture methods across
the countries. Moreover, robust demand for machinery and equipment in the increasing
industrial, mining, agriculture, oil and gas industries in the United States and Canada
and rapid implementation of new and effective hydraulic component technologies are
expected to steer the hydraulic components market in North America. The Asia Pacific
hydraulic components market is anticipated to develop on account of growing applications
and demand in machinery and equipment used in agriculture, industrial, forestry, marine,
and mining industries. Asia Pacific is one of the key regions for mobile hydraulic sales
on account of an increasing percentage of agricultural vehicle production and a declining
captive market. Moreover, hydraulic excavators have encountered an increase in
construction projects in emerging economies. Various countries like India, China and
others are examples of developing regions where infrastructure and commercial projects are
on the rise, resulting in a high demand for hydraulic components.
(Source:prnewswire.com, marketsandmarkets.com, market data
forecast.com).
Outlook
The global hydraulic components market is anticipated to grow on
account of infrastructure development and investment in construction activities. The
global construction industry is expected to grow from USD 7.28 trillion in 2021 to USD
14.41 trillion by 2030. Moreover, hydraulic machines are utilized in a variety of
industrial and special-purpose vehicle verticals, such as platform vehicles, forklifts,
transport vehicle attachments and garbage trucks. Heavy machinery and equipment are in
high demand from a variety of end-use industries, comprising aerospace, industrial,
testing machinery/simulator, material processing/forming machinery, autos, mining and
ships/_shing machinery.
Indian hydraulic component industry review
The Indian hydraulic component market is expected to grow at a CAGR of
6.2% between 2020 and 2026. The hydraulic machinery can be operated in diverse industries
like construction, aerospace and defence, steel plants, mining and agriculture machinery,
among others. The upward trajectory of these industries has an immediate impact on the
hydraulic components industry. The hydraulics component industry witnessed a decline in
demand due to the interruption of all industrial activities for months owing to the
nationwide lockdown declared to curb the pandemic.
The hydraulics industry is expected to rebound as the numerous sectors
it serves have seen a demand recovery following the lockdown. These sectors comprise core
sectors such as road construction, rural development and mining, where the government has
assigned large brackets for infrastructural development
Sectoral demand drivers
Infrastructure: The infrastructure sector is an important element of a
country?s economy. In 2021, the National Infrastructure Pipeline comprised 7400
infrastructure projects across roads and railways. The Government invested USD 1.4
trillion for the country?s infrastructure development as of July, 2021 through
National Infrastructure Pipeline. Forthcoming infrastructure projects like construction of
new roads, highways, and freight corridors etc. is expected to enhance the demand for
hydraulic components and equipments.
Urbanisation: India is at the cusp of rapid urbanization. The
country?s urban dwellers are expected to double from 400 million to 800 million in
the next two decades. In 2047, when India celebrates 100 years of independence, half of
the country?s population is expected to live in urban areas.
Manufacturing: The Government aims to position India as the
manufacturing hub of the world through various initiatives such as ‘Atmanirbhar
Bharat? and ‘Make in India?. Post outbreak of the Covid-19 pandemic,
nations intending to shift their supply chain from China is looking at India as a
preferable option.
Core sectors: Core sectors such as steel and coal are principal drivers
of economic growth. The government has targeted to ramp up steel production to 300 million
tonnes and domestic per capita steel consumption to 160 Kg by 2030. India?s coal
demand is expected to increase to 1.5 billion tonnes by 2030.
Increasing population: India is expected to surpass the population of
China by 2023. India has advanced in terms of infrastructure and economy, in order to
fulfill the demand of its increasing population. The government has shown its proactive
approach by launching a series of economic and infrastructural projects to fulfill its USD
5 trillion economy target by FY 2024-25.
(Source: IBEF)
Opportunities
Yuken India aspires to avail the growth prospects in the hydraulics
industry: It is a highly regarded brand with a rich legacy It provides assortment of
products to satisfy various customer needs
Its brand is familiar for rendering quality service standards and
quicker delivery time Its products are available at reasonable prices and can be matched
with international standards.
It embarks on research activities to increase product development
capabilities It has established longstanding relationships with customers and accounts for
a sizeable market share.
| Threats |
|
|
|
| Increasing input costs |
Changing taste and preference of consumers |
Increased cost for technology upgradation |
Requires constant development of new products |
| Unsteady foreign currency |
Increased competition in global market |
Growing competition |
Environmental threat owing to oil leaks |
Total expenses stood at RS 322.31 crore, including tax expenses worth
RS 4.97 crore and deferred tax charge/ (benefit) & MAT credit entitlement worth RS
1.05 crore. Profit after tax, including other comprehensive income (OCI), stood at RS
13.60 crore as against RS 4.96 crore during the previous year.
Net worth stood at RS 190.89 crore as on 31st March, 2022
compared to RS 178.07 crore as on 31st March, 2021.
Property, plant and equipment and intangible assets increased by 17% to
RS 140.29 crore during FY 2021-22 from RS 120.24 crore during FY 2020-21.
Capital work-in-progress for the year increased to RS 15.92 crore
during FY 2021-22 compared with RS 12.56 crore during FY 2020-21.
Cash and cash equivalents stood at RS 3.68 crore as on 31st
March, 2022 compared to RS 5.85 crore as on 31st March, 2021.
| Key financial ratios |
|
|
| Particulars |
2021-22 |
2020-21 |
| EBIDTA/turnover (%) |
11 |
11 |
| Net profit/turnover (%) |
4 |
2 |
| Debt-equity ratio |
0.58 |
0.59 |
| Current ratio |
1.15 |
1.25 |
| Interest coverage ratio |
3.27 |
1.53 |
| Inventory turnover (number of days), excluding residential
units from JDA |
147 |
203 |
| Debtors turnover (number of days) |
116 |
146 |
| Return on net worth ( %) excluding residential units from JDA |
15 |
6 |
| Book value per share (H) |
159.07 |
148.39 |
| Earnings per share (H) |
11.42 |
4.38 |
JDA: Joint Development Agreement
Internal control systems and their adequacy
The organizational culture of Yuken India has been built on the
foundation of transparency and accountability. The Company practices fair and
comprehensive corporate governance through the implementation of its Code of Conduct and
various policies formed in compliance with SEBI (Listing Obligations and Disclosure
Requirements) Regulations,
2015. The Company has Prevention of Sexual Harassment Policy modeled
after Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013.
The Company has a proactive Audit Committee that routinely oversees and
controls internal processes. The Committee of the Board and the Constitution of the
Company ensures that the accounting policies and internal procedures are in compliance
with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
Human resources
Yuken India Limited believes that its competitive advantage lies within
its people. The Company?s people bring to the stage a multi-sectoral experience,
technological experience and domain knowledge. The Company?s HR culture is rooted in
its ability to subvert age-old norms in a bid to enhance competitiveness. The Company
always takes decisions in alignment with the professional and personal goals of employees,
achieving an ideal work-life balance and enhancing pride of association. The
Company?s employee strength stood at around 500 employees as on 31st
March, 2022.
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