Dear Shareholders,
The year began with trends of a positive change in the world economy with signs of
stabilisation from the accommodative monetary policies rolled out by Governments of many
countries to boost business. However, geo-political posturing, protectionist trade
policies and stress in key emerging market economies weighed down global economic growth,
particularly manufacturing and trade in the second half of 2019. The Covid-19 pandemic
impacted this further in great measure and hence, global growth which was estimated to
reach 3.3% in 2020 plunged to an all time low of -3% registering a sharp decline in the
fortunes of almost all countries across the world.
The Indian Economy began the year with a slowdown in core sectors such as automotive,
construction, mining, iron and steel, etc. It was further accentuated with muted market
growth, credit stress and deferred discretionary spends dictating customer sentiment.
Signs of a revival were evident in the second half of the year with manufacturing activity
showing a moderate increase based on supportive Government policies to accelerate growth.
However, the pandemic and the resultant lockdown in March brought all business activity to
a standstill with the GDP plunging to 1.9% for the fiscal 2019 -20.
The Indian automotive sector witnessed a weak market response. The Government mandated
transition from BS IV to BS VI emission standards, a halt in the launch of new technology
products, inventory accumulation and finally the lock-down, all of which, had a huge
overall impact on the sector. Sales in the last month of FY20 plummeted to the lowest in
four years, registering a drop of nearly 40-80% across segments.
TII with a large presence in the Auto sector was impacted by the industry slowdown due
to reduced offtake from OEMs recalibrating their capacity utilisation. Despite the fall in
the order book, the Company increased its customer engagement, partnering with auto majors
and leveraging its engineering expertise to develop new products for the BS VI migration
in Passenger Vehicles, tubular front fork products for the two wheeler segment, and safety
critical parts in seating solutions for both the Indian and global market. To counter
balance the slowdown in the OEM business, the Company's strategic sectoral shift to mine
the opportunity in the Aftermarket, with innovative products and an expanded channel,
proved a game changer in a challenging year.
An agility to adapt to a changing environment and embrace new technologies has always
been TII's main forte. The Company is focusing on its inherent strength and strong
business fundamentals to build a resilient edge.
The Railway sector proved a major growth engine for the Company. With the Government of
India's focus on the expansion and modernization of the Railway network and its ‘Make
in India' drive, the sector is poised for accelerated growth. TII, as a trusted supplier
of quality assemblies and components for the Railways, is well positioned to mine the
burgeoning growth potential of the sector.
The Bicycles Business has reinvented itself and despite its strategic exit from the
institutional segment, has managed to emerge stronger and more resilient with a roadmap
for growth going forward.
At TII, we focused on building resilience for long term growth in each of the business
with strategic capacity expansions and creating new process capabilities. A manufacturing
facility at Rajpura for high strength tubes and telescopic front fork products, expansions
of the manufacturing facilities at Thiruninravur, Sanand and Bawal for auto components, a
new greenfield facility for conveyor chains and expansions at Kakkalur and Uttarakhand for
railway parts and sub assemblies were established during the year.
The Company continued its efforts in expanding its global footprint with new market and
customer development in Europe, South East Asia and China in the Engineering business and
building new distributors and channel partners in Central America and SAARC in Metal
Formed Products. The focus during the year was on internal capability development to
sustain and grow in the export market.
Our subsidiary Shanthi Gears, while focusing on its financial priorities, strengthened
its presence in the Servicing and Replacement segment of gears. Service centres in
strategic locations across the country helped sustain the competitive advantage. The
business continued to build relationships through high level of customer engagement during
the year.
To build resilience and growth, Sedis focused on a strategic deepening of its end-user
engagement, expanding the distribution channel outside of France and ramping up presence
in new, high potential areas, in addition to improving margins with various cost
management initiatives and better working capital management.
Our people are our greatest asset and they have demonstrated great commitment and
resilience in these challenging times. The TQM (Total Quality Management) and TPS (Toyota
Production System) work culture has embedded a transformational, future-ready ecosystem of
goal driven teams working in tandem to take TII forward.
A relentless focus on cost management and fiscal prudence, value engineering and
customer partnering has enabled the Company to record a creditable performance
demonstrating its resilience despite being in a challenging year.
As we brace ourselves to face the headwinds of an economic slowdown of a mammoth scale,
we need to reinvent new methods, build new competencies to stay resilient. I am sure, TII
under the able leadership of Mr. Vellayan Subbiah and the Senior Management team would
rise to the occasion, as they have always done and take the Company forward on the growth
path while facing many a challenge.
Mr. Pradeep V Bhide, Independent Director on our Board retires in July 2020. Mr.
Bhide's association with TII spans well over a decade, both before and after its demerger.
He has contributed immensely to TII's growth, as a senior Member of the Board and as
Chairman of the Audit and Risk Management Committees. We at the Board, thank him for his
outstanding contribution and wish him the very best.
The members of the Board continue to be a great source of support and encouragement to
the Company's management team and to me in particular. I thank them for their insight and
involvement in building the business.
I also take this opportunity to express my gratitude to all of you, our esteemed and
valued shareholders for your continued support and the trust you have reposed in the
Company.
Yours sincerely,