Dear Shareholders,
Welcome to the FY 2023-24 annual report of Motherson Sumi Wiring India
Limited (MSWIL). This is the third annual report since MSWIL was listed at the BSE
(formerly Bombay Stock Exchange) and National Stock Exchange (NSE) on 28th
March 2022. MSWIL was established by demerging the wiring harness business from its parent
company Samvardhana Motherson International LImited (SAMIL), formerly Motherson Sumi
Systems Limited (MSSL). We continue to benefit from the strong foundation provided by both
our partners, Sumitomo Wiring Systems (SWS) and SAMIL.
Financial highlights
FY 2023-24 has been a year of remarkable growth for MSWIL. Your
company's revenues have grown by 18%, reaching INR 8,328 crores. Our operating EBITDA
stands at INR 1,013 crores, while PAT reached INR 638 crores. We achieved a ROCE of 48%,
exceeding our targets. Our robust operating cash flows and debt-free status as of March
31st, 2024, further underline our financial strength. Also, in line with the Motherson
Vision 2025, we have declared a dividend payout of 55% of profits after taxes, equating to
INR 0.80 per share.
These outstanding results have been made possible by the unwavering
trust of our customers across India and the exceptional dedication and hard work of our
teams at all our units and facilities. I extend my heartfelt gratitude to each and every
one of you for your contributions to our success.
This year's theme
The theme of this year's annual report is "The secret of success
is the consistency of purpose."
This quote by Benjamin Disraeli, a popular British statesman from the
19th century, reminds us of the importance of creating an environment inside Motherson
where our values and purpose are at the centre of what we do. Building plants, buying
machines and creating processes are not enough. It is about the people and the way they
collaborate that truly makes the difference. We see that time and time again in our units
across the country. The consistent practice of our values and purpose allows us to truly
serve our customers and meet their needs effectively. It is from these values and
principles that we can build long-term relationships with our partners and the communities
we operate in. Our commitment to these values and goals is what allows us to create
sustainable value for our investors. We believe that in a digital, fast-changing world,
remaining true to human values is very important.
Aligned with key industry trends
Consumers are increasingly looking for advanced safety features,
connectivity, and infotainment systems, especially in the passenger-car segment.
Therefore, automotive manufacturers are building complex electronic and electrical parts
into their vehicles, such as sensors, cameras, and displays.
As India's leading provider of wiring harness solutions, this presents
new opportunities for MSWIL. Our extensive industry experience, coupled with our
unwavering commitment to quality and innovation, helps us deliver the wiring harness
solutions our customers need to meet these trends.
Demand for alternative powertrains, including electric and hybrid
vehicles, is growing as well. Both EVs and hybrids require specialised wiring harnesses
capable of handling high voltages and currents. MSWIL is spearheading innovation in this
space, collaborating with OEMs to provide new-age wiring solutions for these vehicles. For
example, we are investing in research and development to expand our expertise in
high-voltage wiring harness technology and related components. We have made progress in
this area during the last fiscal year, adding new products to our offerings. Our goal is
not only to fulfil the need for these critical components but also to set new standards
for performance, reliability, and safety.
Growing Indian automotive market
The Indian automotive market is experiencing strong growth, led by
passenger cars. In FY 2023-24, a record 4.9 million* passenger vehicles were produced, up
from 4.6 million* in the previous year.
A large percentage of this growth comes from SUVs. There was strong
growth in other segments as well, including in two-wheelers and commercial vehicles. This
growth means there is a greater need for wiring harness solutions, and MSWIL is
well-positioned to support our customers in meeting this growing demand.
We believe India's automotive potential is vast. Especially given that
the penetration rate is just 32 cars per thousand people and the fact that India has the
second- largest road network in the world.
As a result, OEMs across India are actively preparing for expansion.
Many OEMs are investing in new manufacturing facilities and increased production capacity
to meet the growing demand for vehicles. With 26 plants across India located in each of
India's automotive production regions, MSWIL is well-equipped to serve the evolving needs
of our customers. Two plants are currently being setup and will be operational soon.
These new facilities will not only increase our production capacity but
will also enhance our ability to provide new wiring harness solutions that satisfy the
needs of our customers across all segments.
We are also implementing several digitisation and automation
initiatives to improve our operational efficiency and productivity, and we continue to
invest in our people to promote continuous learning. This enables us to serve our
customers more effectively and provide sustainable opportunities for our associates.
We believe the Indian automotive industry is entering a new period of
growth, and we are excited to be a part of this journey.
Gratitude
Finally, I want to extend my deepest gratitude to our customers for
their continued trust in us and for the opportunity they give us to be part of their
success. I also thank our partners for their dedication and commitment to helping us
ensure we always deliver the best solutions to our customers.
We are very proud of the recognition we have received in the form of
numerous awards from our customers and industry bodies. These accolades are a testament to
the hard work and dedication of our people. I would like to take this opportunity to
congratulate each one of you on these achievements.
It is because of you that Motherson continues to delight its customers
regardless of what's happening in the market.
And finally, we want to thank the central, state, and local
governments, banks, and financial institutions for their collaboration.
In conclusion, I am optimistic about the future of MSWIL and the Indian
automotive industry. We are committed to creating value for our customers, investors,
partners, employees, and the communities where we operate.
May God continue to bless us and show us the right path. On behalf of
MSWIL, thank you all.
Sincerely,
Vivek Chaand Sehgal, Chairman, Motherson Sumi Wiring India Limited