Dear Shareholders,
The global automotive industry landscape continues to transform, and along with it the
auto components industry. With India already cementing its place as a global component
sourcing hub, we are well positioned to navigate through the emerging challenges and
capitalise on the upcoming opportunities. Our tradition of pursuing excellence and keeping
‘customer at the core' remained intact this year as well, backed by determination,
prudent foresight and strong business fundamentals.
Economy overview
The synchronised upswing in the global economy that began around mid-2016 suddenly
changed course in the second half of 2018 as the continued momentum in manufacturing and
trade dissipated. Sentiments were further dampened by the hardening of US interest rates,
volatile crude prices, along with uncertainty over Brexit and heightened rhetoric around
protectionism.
The Indian GDP growth dipped below 7% for full-year 2018-19, after growing at 7.5% in
the first half, due to weak industrial output, and overall subdued demand. However, with
the election overhang now behind us, the economy should grow at over 7% going forward,
driven by the government's resolve towards achieving fiscal consolidation and continued
push for structural reforms.
The Indian automobile industry too had started FY 2018-19 on a positive note, supported
by normal monsoon, rising rural demand, the government's infrastructure push and rise in
industrial activity. However, most vehicle segments witnessed a considerable slowdown in
the second half due to higher fuel prices, lower financing availability, steep price
increase on account of insurance regulation changes in September 2018.
Driven by determination
We registered 7% growth in net sales with moderate demand from Indian OE customers. In
Indian Aftermarket, we expanded reach and introduced new products. Despite increasing
competitive intensity, our customer-centric approach and superior formulation library
helped us to maintain market leadership position.
We continued to invest in validation and testing capabilities and energy conservation
initiatives. We continued to place significant emphasis on people development and employee
engagement initiatives, which has resulted in getting certified as a Great Place to Work
for the third time in a row.
We are driven by determination to maintain the steady growth momentum focussing on
under penetrated segments and strengthening our aftermarket business.
Progressing with optimism
The first half of FY 20 appears challenging with slowing demand in most of the vehicle
segments. The anticipated pre-buy on account of transition to BS VI, normal monsoon, the
government's continued reforms and infrastructure push are likely to propel growth. We
remain optimistic about the evolving opportunities in the auto component industry and the
structural trends remain positive in the long term.
We will continue to invest in R&D and drive innovations to build value-add
products. We will leverage on the expertise of our technical collaborator to introduce new
products in India and tap into opportunities to supply in export markets.
Considering the potential demand for the Two-wheeler segment, our Company has been
proactively creating capacities with special focus on quality enhancement through latest
technologies at its Puducherry Plant.
We are progressing with optimism on long term market opportunities and are determined
to drive efficiencies to create value for all our stakeholders.
On behalf of the Board of Rane Brake Lining Limited, I would like to thank all our
stakeholders – Customers, Employees, Partners, Vendors, Bankers, Government,
Communities and most importantly you – our shareholders, who have been part of this
exciting journey.
Yours sincerely,
L Ganesh
Chairman