Dear Shareholders,
With utmost privilege and delight, I am presenting the 38th Annual Report
For the Financial Year ended on March 31, 2024.
As we take a moment to contemplate the outstanding achievements and significant
milestones of the past year, we feel an immense sense of pride in our steady performance
and a deep sense of optimism for the future that lies ahead of us. In a time of
unprecedented challenges, your company has demonstrated resilience, adaptability, and a
firm commitment to its core values. We reinforce our dedication to honesty and integrity
by being transparent about our accomplishments, difficulties, and long-term goals. We have
continued to navigate the ever-evolving landscape of the automotive industry with
innovation, collaboration, and a customer-centric approach. This, in turn, strengthens the
trust that shareholders place in us as stewards of their investments.
Global and Domestic Economic Affairs
The world is in a constant state of flux, marked by new technological innovations,
geopolitical shifts, and environmental crises. Industrial strategies are now recognized as
multifaceted tools, impacting economic, social and national security dimensions. Your
Company has also adopted a number of strategies to face obstacles and boost performance in
the future.
The global economy remains remarkably resilient, with growth holding steady as
inflation returns to target. Although, the journey has been eventful, starting with
supply-chain disruptions in the aftermath of the pandemic, a Russian
- Ukraine war augmented with Isarel
- Hamas war have triggered a global energy and food crisis, a considerable surge in
inflation, followed by a globally synchronized monetary policy tightening.
Due to unprecedented Isarel conflict, the Red Sea region has become a focal point of
concern due to the skirmishes that have developed around it, involving several West Asian
countries and non-state factors. This region is highly critical for global trade as the
gateway to the Suez Canal, the fastest route for freight movement from Asia to Europe,
through which about 12% of global shipping traffic passes. India too, is heavily reliant
on the Red Sea for approximately 80% of its exports to Europe. It therefore faces
significant challenges due to significant maritime chokehold.
It is noticed that on a year-over-year basis, global growth bottomed out at the end of
2022 at 3.5 percent followed with 3.3% in 2023. According to latest projections of IMF,
growth for 2024 and 2025 will hold steady around 3.2 percent, with median headline
inflation declining from 5.9 percent at the end of 2024 to 4.5 percent at the end of 2025.
Most indicators point to a soft landing.
According to Ministry of Finance, the Indian Gross Domestic Product (GDP) grew by 8.2%
in the financial year ending March 2024, well above the initial print of 7.3%, and revised
higher from the second estimate of 7.6%, to consolidate India as the fastest-growing major
economy in the world.
Recently, the Asian Development Bank (ADB) also upgraded India's GDP growth forecast
for Financial Year 2024-25 from 6.7% to 7% and 7.2% in Financial Year 2025-26, driven by
robust public and private investment and strong services sector. The triggers for growth
in FY 2024 are expected to come from higher capital expenditure on infrastructure
development both by central and state governments, rise in private corporate investment,
strong service sector performance and improved consumer confidence. Growth momentum will
pick up in FY 2025 backed by improved goods exports and an increase in manufacturing
productivity and agricultural output.
Due to consistent efforts of the Government, the monetary policy may become less
restrictive, which is expected to facilitate rapid off take of bank credit. Demand for
financial, real estate, and professional services will grow while manufacturing will
benefit from muted input cost pressures that will boost industry sentiment. Expectations
of a normal monsoon will help boost the growth of the agriculture sector.
I am confident that the Indian economy is on Fast Track and we all can look forward to
a robust economy and expected to achieve the motto of becoming the 3rd Largest
Economy in the coming years.
Indian Automotive Sector - Future Outlook
The Indian automobile industry has historically been a good indicator of how well the
economy is doing, as the automobile sector plays a key role in both the macroeconomic
expansion and technological advancement. The two-wheeler segment dominates the market in
terms of volume, owing to a growing middle class and a huge percentage of India's
population being young.
Moreover, the growing interest of companies in exploring the rural markets further
aided the growth of this sector. The rising logistics and passenger transportation
industries are driving up demand for commercial vehicles. Future market growth is
anticipated to be fuelled by new trends including the electrification of vehicles,
particularly three-wheelers and small passenger automobiles.
As per the Society of Indian Automobile Manufacturers (SIAM), the Auto industry
generates employment of 13 (thirteen) persons for each truck, 6 (six) persons for each
car, 4 (four) persons for every three wheeler, and 1 (one) person for each two-wheeler.
The Automotive Mission Plan (2016-26) projects to provide direct incremental employment to
3.2 million by 2026. The industry is a leader in exports and provides jobs to over 3.7
crore people.
It is expected that by 2026, the automobile component sector will contribute 5-7% of
India's GDP. In terms of market size, the Indian passenger car market was valued at US$
32.70 billion in 2021, and it is expected to reach a value of US$ 54.84 billion by 2027
while registering a CAGR of over 9% between 2022-27. India has ample growth potential for
the automobile industry considering that car ownership in India lags significantly behind
developed regions like the US, China, and Europe, where 80-90% of the population owns a
car, compared to only around 8% in India.
As a part of the Government's initiatives to boost the automotive sector, under
phase-II of FAME India Scheme, a subsidy amounting to US$ 696.8 million (Rs. 5790
crores) has been awarded to EV manufacturers on the sale of 16,70,736 electric vehicles in
the financial year 2023-24. To give a further push to clean mobility in the country, the
Ministry of Heavy Industries has announced that the scheme outlay of FAME India scheme has
been enhanced from Rs. 10,000 crore to Rs. 11,500 crore under Phase II.
By adopting an optimistic approach, coupled with confidence and diligence, we can
thoroughly explore the myriad opportunities that lie ahead. Maintaining a positive outlook
amid ongoing positive trends is crucial and this mindset not only propels us forward but
also enables us to capitalize on these favourable circumstances to achieve our goals and
aspirations.
Company Performance and Strategy
I would like to acknowledge the performance of your company throughout the Financial
Year 2023-24 and extend my appreciation to our stakeholders. Our team has demonstrated a
commitment to our core business values of integrity, excellence, commitment, and
transparency, reflecting these principles in their work.
Your company is currently dedicated to enhancing asset utilization by strategically
utilizing existing capacity, fostering deeper engagement with customers, and implementing
cost-saving measures. Moving forward, our primary focus will remain on achieving
manufacturing excellence and ensuring top-quality products while optimizing costs.
To summarise the financial results for the Financial Year 2023-24, your Company
achieved a turnover of Rs. 7,799.84 million and profit after tax of Rs.
492.69 million on a standalone basis despite challenges. After consolidating the
financials of the Company with its Subsidiaries, the company achieved a turnover of Rs.
11,069.05 million and profit after tax of Rs. 1,142.53 million (including Rs.
770 million as an exceptional items) on a consolidated basis.
On the export front, on a standalone basis, yourssss Company recorded an export
turnover of Rs. 2,293.81 million as compared to Rs. 2,262.22 million in
previous financial year. The share of total export turnover stood at 29.41% of the total
turnover of the Company.
We have enough expertise in our portfolio as Manufacturers and suppliers of gears and
transmission equipment which helps us to tap into new markets. The Board continued to
perform its role of monitoring the Company's performance including its operational &
financial performance and progress in delivering new growth. Further, the Company is
strategically following a consistent and long-term approach, to grow cash flow across the
cycle and deliver competitive returns through a focus on operating efficiencies, quality,
and timely delivery. Considering the interest of the Shareholders, your Company has
decided to share the profits with the Shareholders by recommending the highest ever
dividend of 50% i.e. Rs. 5 per equity share of Rs. 10 each for Financial
Year 2023-24.
The overarching strategy for the company revolves around optimizing asset utilization
by strategically leveraging existing capacities to drive operational efficiency and
achieve targeted growth objectives.
The timeless wisdom of the Vedas, that teaches us that true prosperity is not measured
solely by material wealth, but by the positive impact we make on the world around us.
^^RELKS EK T;KSFRXZE;
** This shloka inspires us to lead others from darkness to light, symbolizing our
dedication to illuminating the path of knowledge through education and research. ‘To
transcend ignorance and embrace enlightenment' is the essence of this idea. At your
company, we deeply embrace this ethos in our work culture, which is also reflected in our
CSR Policy. Our policy underscores our commitment to being a socially responsible
corporate entity, dedicated to making meaningful contributions to the society. To exhibit
the commitment, your Company has year-marked contributions of Rs. 1,18,00,000/-
(Rupees One Crore Eighteen Lakhs) for the betterment of society during the Financial Year
2023-24 as per the stipulations under CSR Rules and regulations.
As I conclude my address, I, along with my colleagues on the Board of the
Company would like to thank and record our sincere gratitude to all our stakeholders
for the confidence & trust reposed upon us and our deep appreciation to all employees
of the Company for their hard work, commitment and wholehearted support for achieving
company's goals and targets. I further thank all our customers, our supply chain partners
and our bankers for reposing their confidence & supporting us. I am confident that
this journey will continue to be equally fulfilling and rewarding as we move ahead.
Deep Kapuria
Chairman