Goel Food Products Ltd Management Discussions

Banquets,Catering or Hotels has been a regular phenomenon of our society since ages. Over the years, this activity though being of the nature of services, has gained status of industry offering employment to hundreds of thousands people globally. It’s contribution to a nat ions GDP is remarkable.

In recent past, corona pandemic had caused substantial damage to this industry, the tremors of which are being felt even now. However, globally the pandemic has been tamed and the world is all set to start celebrating party again.

Having said this, damage control will take time. Infrastructures like hotels, banquets, catering are still not fully geared up to serve the desired volume. All these has led to increase in cost of service and resultantly, though demand is there but supply is coming at higher cost.

Amidst all these negative sentiments, the positive vibes is coming from desperation of people at large to celebrate parties and functions. They lived in cage like situation for last two years and are willing to enjoy parties and functions.

INDIAN ECONOMY

The Indian tourism and hospitality industry have emerged as one of the key drivers of growth among the services sector in India. Tourism in India has significant potential considering the rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. Tourism is an important source of foreign exchange in India similar to many other countries. The foreign exchange earnings from 2016 to 2019 grew at a CAGR of 7% but dipped in 2020 due to the COVID-19 pandemic.

In 2020, the Indian tourism sector accounted for 39 million jobs, which was 8% of the total employment in the country. By 2029, it is expected to account According to WTTC, India ranked 10th among 185 countries in terms of travel & tourism’s total contribution to GDP in 2019. During 2019, contribution of travel & tourism to GDP was 6.8% of the total economy,

~ Rs. 13,68,100crore (US$ 194.30 billion).

MARKET SIZE

India is the most digitally advanced traveller nation in terms of digital tools being used for planning, booking, and experiencing a journey. India’s rising middle class and increasing disposable income has supported the growth of domestic and outbound tourism.

By 2028, Indian tourism and hospitality is expected to earn US$ 50.9 billion as visitor exports compared with US$ 28.9 billion in 2018.

The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20.

The Indian airline travel market was estimated at ~US$ 20 billion and is projected to double in size by FY27 due to improving airport infrastructure and growing access to passports

The Indian hotel market including domestic, inbound and outbound was estimated at ~US$ 32 billion in FY20 and is expected to reach ~US$ 52 billion by FY27, driven by the surging demand from travelers and sustained efforts of travel agents to boost the market.

OUTLOOK

With safety & hygiene as the foremost criteria, the pandemic has forced the banquets &hotel industry to come up with innovative ways to utilise their assets by opening newer revenue streams such as co-working space, use of technology, redesigning hotels and others. Though the flow of large booking is high in peak season, we have started focusing on attracting small bookings like kitty party, birthday party, kirtans in off season.

RISKS AND CONCERNS

Economic Risk: Our business is closely associated with the macro environment that impacts the consumers behaviour and spending power. The Covid-19 pandemic has not only led to global health and safety concerns, but has also thrown many economies into slowdown.

Forex risks: Being exposed to a significant number of geographies, the Company deals in a number of currencies and runs the risk of unfavourable movement in any currency leading to financial losses.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal control systems are embedded in all processes across all functions within the Company. These systems are regularly reviewed and wherever necessary, they are modified or re-designed to ensure better efficiency, effectiveness and improved controls All processes and systems are subject to Internal Audit which are further supported by Statutory Auditors who validate that financial reporting is true and fair, and that these controls are designed and operating effectively.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS: