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Automotive Axles Ltd.

BSE: 505010 Sector: Auto
NSE: AUTOAXLES ISIN Code: INE449A01011
BSE LIVE 15:43 | 23 Nov 1293.15 92.20
(7.68%)
OPEN

1206.05

HIGH

1334.45

LOW

1206.05

NSE 15:40 | 23 Nov 1295.80 91.35
(7.58%)
OPEN

1200.00

HIGH

1337.80

LOW

1200.00

OPEN 1206.05
PREVIOUS CLOSE 1200.95
VOLUME 45594
52-Week high 1334.45
52-Week low 582.00
P/E 31.95
Mkt Cap.(Rs cr) 1,954
Buy Price 0.00
Buy Qty 0.00
Sell Price 1293.15
Sell Qty 48.00
OPEN 1206.05
CLOSE 1200.95
VOLUME 45594
52-Week high 1334.45
52-Week low 582.00
P/E 31.95
Mkt Cap.(Rs cr) 1,954
Buy Price 0.00
Buy Qty 0.00
Sell Price 1293.15
Sell Qty 48.00

Automotive Axles Ltd. (AUTOAXLES) - Chairman Speech

Company chairman speech

Dear Shareholders

The global economy seems to be on the road to recovery after a considerable period ofvolatility. Global growth is expected to rise from 3.1% in CY 2016 to 3.5% in CY 2017 and3.6% in CY 2018. What we see here is a more gradual elevation of the curve rather than asignificant jump in global growth rates. In other words downside risks continue to hindergrowth rates especially in advanced countries of the world.

At the other end of the spectrum are emerging markets and developing economies. Theseeconomies have become increasingly important in the global economy in recent years.Although the growth patterns in emerging economies are not uniform we can expect goodgrowth in some of these economies at least for the medium term. And of course the bestperformer in the squad continues to be India.

India's GDP growth rate was 7.1% in FY 2016-17 owing to wide-ranging reforms pursuedby the Government of India; and even some of the state governments participating incompetitive federalism. During the year the government implemented and approved seminalreforms such as demonetisation and GST. Both these initiatives will usher in long-termbenefits for the economy. While demonetisation was the first step towards formalisationand digitalisation of the economy the GST was a radical step in spurring growthcompetitiveness indirect tax simplification and greater transparency.

During FY 2016-17 India also became the world's sixth largest manufacturing countryrising from the previous ninth position. The Union Budget FY 2017-18 has also provided animpetus to manufacturing.

INDUSTRY INSIGHT

We are happy to report another successful year for Automotive Axles Limited (AAL). Wereported a 5.63% revenue growth of Rs. 11488 Million in FY 2016-17 compared to Rs.10875 Million in FY 2015-16. Simultaneously our EBIDTA increased 18.58% to Rs. 1142Million in FY 2016-17 against Rs. 963 Million in FY 2015-16.

FY 2016-17 has been an eventful year for the auto industry. The early part of the yearsaw a revival in automobile sales across segments and the second half of FY 2016-17started witnessing a strong positive sentiment. This was backed by factors such asimproved consumer sentiment (following the Seventh Pay Commission pay hike)averagemonsoon after two successive years of deficit rainfall and low financing costs. Howeverfactors such as demonetisation and lower than anticipated pre-buy on account of change inemission norms led to weak H2 FY 2016-17. Overall the Indian automobile industryregistered a moderate growth of 5.41% in FY 2016-17 over the same period last year.

India's auto component market is growing steadily. Factors such as rising vendorconsolidation faster replacement market growth increasing localisation export-orientedgrowth and growing electronic content per vehicle are drivers of future growth.Interestingly the rate of growth was much faster than the Original Equipment Manufacturer(OEM) segment. This will pave the way for more exports to OEMs from auto componentmanufacturers. The Make in India initiative is extremely relevant for manufacturingcompanies like ours.

OUR PERFORMANCE

We are happy to report another successful year for Automotive Axles Limited (AAL). Wereported a 5.63% revenue growth of Rs. 11488 Million in FY 2016-17 compared to Rs.10875 Million in FY 2015-16. Simultaneously our EBIDTA increased 18.58% to Rs.1142 Million in FY 2016-17 against Rs. 963 Million in FY 2015-16. Our net profit grew by39.70% to Rs. 486 Million in FY 2016-17 against Rs. 348 Million in FY 2015-16 andour earnings per share stood at to Rs. 32.15 in FY 2016-17 compared to Rs. 23.01 in FY2015-16 a growth of 39.7%. Our strong performance was driven by enhanced operationalefficiency stringent end-to-end performance monitoring increased input-output ratio andbetter manpower productivity.

We have continued to upgrade our manufacturing facilities through enhanced capacity andadoption of latest technologies which will benefit us through better productivity.Moreover we have delivered on our ‘consistent quality pledge' by ensuring precise‘part per million' standards.

We reinforced our concept of Built in Quality (BIQ) to achieve world-classmanufacturing standards through multiple initiatives. Our teams ensure quality of productsby following the principle of ‘Don't Accept Don't Produce Don't Release' defectiveproducts.

We also focused on sustainable business practices like usage of rain harvested waterfor manufacturing processes installation of bio-gas plant and solar rooftops. We alsoimplemented energy-efficient lighting solutions across shop floors.

TEAM AAL

At AAL we believe our most important asset is our people. We nurture our people bycontinuously upgrading their skillsets. We also encourage diversity in our workforce. Wepromote a performance-based

We reinforced our concept of Built in Quality (BIQ) to achieve world-classmanufacturing standards through multiple initiatives. Our teams ensure quality of productsby following the principle of ‘Don't Accept Don't Produce Don't Release' defectiveproducts.

inclusive culture that awards and recognises quality services. We have a robust talentmanagement system which helps us to organise need-based training programmes.

Our company is on a firm growth track and we will continue to respond to opportunitiesreinforce our competitive advantage and play a larger role in India's auto componentindustry. On behalf of the Board of Directors I must express my sincere gratitude to ourshareholders employees customers business associates and other stakeholders for theirtrust and support.

Warm regards

Dr. B N KALYANI

Chairman