Celebrating 50 Glorious Years
As we celebrate our Golden Jubilee, we extend our heartfelt gratitude
to you for your unwavering support and trust over the years. This milestone is a testament
to our collective dedication, innovation, and resilience. Your belief in GGAG has been
pivotal in our journey, and we are excited to continue building on this legacy. Here's to
50 years of excellence and to many more years of shared success and growth.
Dear Shareholders,
It is with great pleasure that on behalf of the Board of Directors, I
present to you the 50th Annual Report of GG Automotive Gears Ltd (GGAG) for the Financial
Year ended 31st March, 2024 (FY 2023-24). In FY2023-24, GGAG achieved a total income of
Rs. 95.28 crores, marking a 24% increase from the previous year, and reported an operating
income of Rs. 12.05 crores, up by 57%. This growth trajectory underscores GGAG's
dedication to its stakeholders and highlights the company's commitment to realizing its
vision of becoming a globally recognized manufacturer of gears, forged components, and
reduction gearboxes.
Overview of the Economy and Industry
The fiscal year 2023-24 has been remarkable for India. It emerged as
one of the fastest-growing major economies globally and demonstrated impressive
resilience, even as many developed countries grappled with slowing growth, high inflation,
and geopolitical challenges. During FY 2022-23, the Indian economy grew by 8.2%, following
a robust 7.2% growth in the previous fiscal year.
India's enhanced outlook is due to the government's focus on
self-reliance and its emphasis on boosting domestic manufacturing. Additionally, the
‘China Plus One' strategy is gaining traction as companies look to diversify
their dependencies beyond China. This shift has positioned India advantageously, given its
strengths in manufacturing, research and development, and access to affordable, skilled
labour.
Inflation and interest rates appear to be under control, and we
anticipate that supply chains will continue to stabilize, which should help manage raw
material prices and enhance operational efficiencies in the short to medium term. However,
commodities like steel remain vulnerable to geopolitical and economic uncertainties. In
the industries that GGAG serves, demand remains strong and robust across various sectors,
driven by solid domestic consumption. The Indian Railways has increased its locomotive
production target by 27%, reflecting growth opportunities for GGAG's core business.
The government's initiatives to modernize and electrify the railways, expand freight
capacity, and advance technology are expected to support continued growth and improved
performance in the railway sector. As India aims to become a global hub for metro systems,
with extensive metro projects underway nationwide, GGAG anticipates expansion in the metro
gear sector as well. Additionally, other sectors where GGAG operates including oil and
gas, power transmission, wind energy, cooling towers, mining, and automotive are also
experiencing rising demand.
Key Initiatives
During the financial year, GGAG implemented several initiatives that
successfully reduced our costs per component and improved lead times, while maintaining
rigorous quality control to minimize rejection rates. These efforts have significantly
enhanced overall customer satisfaction.
In terms of facility upgrades, we have retrofitted and refurbished
existing machinery and invested in new equipment to boost the capacity and capabilities of
our production unit. GGAG has added an additional 30,000+ square feet of space to
accommodate this newly added equipment. Improved industrial engineering practices have led
to the establishment of standard operating procedures aimed at optimizing cycle times.
Additionally, our engineering and procurement teams have focused on reducing consumable
costs and reinforcing the importance of robust systems.
Future Outlook
GGAG is optimistic about achieving similar growth levels in the
upcoming financial year. Our strong brand reputation and market presence, combined with
emerging opportunities globally, position us well to meet these goals. Additionally, our
expansion into diverse markets such as wind energy, earth-moving equipment, mining, steel,
and industrial applications will help mitigate the impacts of business cycle fluctuations
and dependencies on any one business sector. GGAG's order book is at a record high, and
our objective is to capitalize on this momentum through efficient execution to solidify
our position as industry leaders.
Warm regards,
Kennedy Ram Gajra
Chairman and Managing Director