Dear Shareholders,
It is my honor to present to you this year's Annual Report. Kalyani Forge is moving
steadfastly in the strategic path of growth as per our Vriddhi Mission 2027. To propel
this growth it has been important to play to our strengths and get rid of weaknesses and
hence our theme for the year has been Gaining Strength. Through deeper engagement with our
customers and the market, we have achieved strategic clarity in terms of thrust areas and
have recorded gains in the same. Our machined conrod business has touched record levels
this year, drivelines and axle business have grown. Exports business has been maintained,
and we have grown our pipeline of new exports business. In the passenger car segment, our
EV-agnostic business has increased which gives us additional strength to be ready for a
multi-powertrain future. We have taken some conscious calls to phase out certain business
or stop pursuing too many opportunities in order to focus better. Let me take you through
some of these areas in more detail.
Encouraging Economic Activity
Globally there have been supply chain disruptions and certain events in Ukraine and the
Red Sea which pose challenges, but many economies are on the path to recovery. Many
markets are now looking at India as a serious sourcing hub for critical manufacturing
products. Kalyani Forge is at the right place and the right time to capitalize these
trends which align well with it's long term strategy.
The Indian economy has been continuing to grow as a leader in the world and this is
seen in the increased or sustained demand in automotive and industrial segments,
notwithstanding certain stock corrections that occur in between.
Accomplishments
Allow me to highlight some of our noteworthy accomplishments during the financial year
2023-24.
The company clocked total revenue of Rs. 236.78 crores in FY24 compared to Rs. 272.83
in FY23. We have achieved Profit After Tax of Rs. 4.55 crores which is 2577% higher than
the previous year.
This achievement demonstrates our resilience and ability to adapt to the changing
market dynamics.
Although we experienced some degrowth in topline, it was largely due to a few lines of
automotive businesses which had come to end-of-life and had lower value addition.
Consequently, these were typically lower margin businesses and the company took a
conscious call not to pursue them further and instead focus on the winning orders on the
latest technology platforms of OEMs which have longer life ahead. Our efforts to regain
our preferred supplier status for new programs is reflected in the record new business
order wins in FY24 which have been at an all time high 20 New Order Wins during the year,
totalling an average annual business value of approximately Rs. 75 cr or $9 million. These
order wins are a mix of exports and domestic business as well as automotive and industrial
segments.
The topline trend is hiding a more important trend of growth for the company. This year
we achieved our highest revenue from machined connecting rods, which is the most critical
part in an engine, and is a core strength of Kalyani Forge since we were the first in
India to develop machined fracture-split connecting rods in the early 2000s. Our strategy
to be the Last-Man-Standing for products like connecting rods in the ICE market will
propel our growth prospects while focusing on what we do best and serving our core
customers better.
Our dedication to innovation and operational excellence has never been more critical.
We are investing in advanced technologies and sustainable practices to enhance our
efficiency and reduce our environmental footprint.
Our engagement in EV development programs represents a pivotal step in aligning our
forging This transition is part of the strategy to focus on its core products offerings of
engine, driveline, axle and turbocharger components with a healthy mix of ICE and EV/EV
Agnostic products.
Gaining Strengths
In the year, we executed on our Capex program with additional capacities of machining
lines. Two new press line projects were also initiated in the second half of FY24 and are
currently under completion. Of note is a 4000T press line which is our largest capacity
forging press so far and will unlock new business in larger sized forgings. This was a
long due project which we had shelved for many years as we were focused on smaller size
businesses. capabilities with the demands of this new era. We are leveraging our expertise
to provide high-quality, precision-forged components that meet the stringent requirements
of electric power trains. Our partnerships with top automotive manufacturers not only
reinforce our position as a key player in the industry but also underscore our commitment
to supporting the transition to sustainable transportation solutions. Another notable
achievement, your company is now certified by the American Bureau of Shipping (ABS) and
Bureau Veritas (BV) for supply of critical forgings for Marine applications.
For cost optimization, we embarked on a power cost reduction program which will yield
savings in the coming year. We also started installation of our first roof-top solar power
system which will help move closer to our sustainability targets as well. This project is
already operational as on the date of this annual report.
We successfully completed several internal milestones of shopfloor upgrades in all of
our plants. We have kicked off a major digitization drive across all departments for which
there will surely be more specific updates next year.
This year as I take on the role of Executive Chairperson, Mr. Viraj Kalyani is promoted
as Managing Director, and new Independent
Directors have joined the Board, we have more leadership bandwidth with a mandate of
growth.
In summary, I am confident that the Company is moving towards the target of growth as
set out last year in our Vriddhi Mission 2027 to at least double revenues with
significantly higher profit margins. I would like to thank all of our employees,
customers, shareholders and investors, supply chain partners, bankers, financial
institutions and all other stakeholders for your continuous support and trust that you
have bestowed in us for many years.
We are gaining strength across the length and breadth of our organization. I look
forward to your continued partnership and working with each of you to take Kalyani Forge
to the next level. Warm regards,
Rohini G. Kalyani
Executive Chairperson