Bombay Cycle & Motor Agency Ltd Management Discussions

Industrial structure and Development:

The Automobile and Hospitality industry are an integral constituent of the growing Indian economy in the long run. It is one of the diversified

Automobile and Hospitality sectors have influenced every aspect of the society in several ways and have changed in order to keep up with the changing times.

The automobile industry is expected to emerge as the worlds third largest passenger vehicle market in the long term, driven by underlying economic growth, increasing consumption demand and mass urbanization over a period of time.

The Hospitality industry is evolving with the advent of new technology and concepts.

Technology plays a significant differentiator in the industry. The key trend that is re-shaping the industry is food ordering platforms which gained popularity due to impact of Covid-19 and will remain so in future also.

Opportunities and threats

Since the Automobile industry is expected to emerge as the worlds third largest passenger vehicle market in the long term, this growth is expected to be driven by new launches in premium segment passenger vehicles over a period of time. Further, with the increasing restaurant trends and ordering food online, opportunity in Hospitality division also looks good in the long term. Further, Food and Beverage (F&B) and Banquets are expected to grow as the same will be required for Corporate Meetings, Pre-Wedding events, Birthday events etc. The inflation has increased in the last few months and this may have some negative impact in the growth of the business in the current year. However, the expectation is that inflation may settle down in the coming months.

As both the segments - Auto Division and Hospitality fall in the category of Luxury segment and not basic necessities, any reduction in the disposable income of the customers especially due to inflation will be considered as a threat in the future. Further for the Hospitality Division, the dependence on several technology platforms and systems would pose a threat to the revenue from food orders.

Segment-wise performance & financial performance

The Company has two reportable segments: Auto Division and Hospitality Division.

During the year under review 2023-24, revenue from Auto division was Rs. 392.62 lacs as compared to Rs. 351.00 lacs in previous year 2022–23. Revenue from the Hospitality division stood at Rs. 527.33 lacs as compared to Rs. 512.02 lacs in the previous Year 2022-23.

Profit before Interest and Tax from Auto division stood at Rs. 411.34 lacs and from Hospitality division stood at Rs. 45.36 lacs.

The total Revenue of the Company comprising of Automobile and Hospitality divisions was Rs. 1201.66 lacs as compared to Rs. 963.61

Lacs in the previous year. Further, the Profit after tax for FY 2023-24 stood at Rs. 340.51 lacs as compared to Rs. 227.08 lacs in previous year 2022-23.

During the year under review, the revenue was higher in Hospitality business than in

Auto business while profits were more in Auto business than in Hospitality business.

Internal control system and their adequacy

The Company has sound and adequate internal control systems that commensurate with its size and nature of business. The Company constantly upgrades its systems for incremental improvements, because it firmly believes that change is the only permanent thing, and without change it cannot progress. The Company periodically reviews its systems. These systems ensure protection of assets and proper recording of transactions and timely reporting.

Risks, concerns and threats

The Automobile and Hospitality industry is prone to impact due to fluctuations in the economy, change in market conditions, competition in the industry, inflation in the country, regulations and other factors.

Motor Services (Auto Division) & Restaurant

(Hospitality Division) has huge staff turnover. Rising staff & utility costs, staff retention & customer/ guests satisfaction are the major concerns for both these Industries. Profitability will continue to be a concern with high operational costs and inflation. To meet this situation, both

Auto and Hospitality division have to look for cost reduction and increase in revenue by adding new customers and additional attention has to be provided towards talent search, training and development of human resources on a long term basis.

Material development in Human Resource/ Industrial Relations front, including number of people employed

The Company believes that its intrinsic strength is its people. The Company has always paid special attention to recruitment and development of all categories of staff. The Company is committed to adhere to the highest standards of ethical and moral conduct of business operations. To maintain these standards, the Company encourages its employees to come forward and express their concerns without fear of punishment or unfair treatment. Industrial Relations remained stable throughout the year. There were 48 permanent employees on the rolls of Company as on March 31, 2024.

Cautionary Statement

This management discussion and analysis may contain forward looking statements within the meaning of the applicable laws, rules and judicial pronouncements, relating to the business strategies, prospects, financial performance etc. The actual results may vary significantly or materially than those contemplated/ implied in the analysis for various reasons including but not limited to Government Policy, macro-economic situations, business cycles, financial

& liquidity situation, demand slowdown, service risks, material costs, etc. The Company does not undertake to make any declarations/ pronouncements of any such eventuality.