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Automotive Axles Ltd.

BSE: 505010 Sector: Auto
NSE: AUTOAXLES ISIN Code: INE449A01011
BSE 09:53 | 25 May 1672.20 23.35
(1.42%)
OPEN

1678.95

HIGH

1680.55

LOW

1656.25

NSE 09:39 | 25 May 1681.80 28.90
(1.75%)
OPEN

1661.20

HIGH

1683.95

LOW

1656.00

OPEN 1678.95
PREVIOUS CLOSE 1648.85
VOLUME 70
52-Week high 1768.00
52-Week low 1169.05
P/E 33.98
Mkt Cap.(Rs cr) 2,527
Buy Price 1664.35
Buy Qty 3.00
Sell Price 1669.50
Sell Qty 1.00
OPEN 1678.95
CLOSE 1648.85
VOLUME 70
52-Week high 1768.00
52-Week low 1169.05
P/E 33.98
Mkt Cap.(Rs cr) 2,527
Buy Price 1664.35
Buy Qty 3.00
Sell Price 1669.50
Sell Qty 1.00

Automotive Axles Ltd. (AUTOAXLES) - Chairman Speech

Company chairman speech

Dear Shareholders

We are in the middle of a once-in-a-lifetime crisis. The COVID-19 pandemic which hasimpacted every aspect of human life in the past 15 months continues to pose significantchallenges to the physical economic as well as emotional well-being of people across theglobe. That said the way the frontline workers especially those in healthcare haveserved humanity it has few parallels in history. I take this opportunity to appreciatethis great service that goes beyond the call of duty.

Macroeconomic environment

Due to the pandemic-induced disruptions both developed and developing economiesrecorded de-growth during FY 2020-21 with China being the only exception.

In India prompt response from the government and the Reserve Bank of India led tobetter outcomes after the economy contracted significantly in the first two quarters.With strong fiscal and monetary policy support totalling around C30 trillion the Indianeconomy returned to a positive growth trajectory in the third quarter aided by strongpent-up demand the impending festive season and the discovery of vaccines. However amore intense second wave at the end of the fourth quarter delayed the revival timelinewith the imposition of localised lockdowns.

Industry landscape

India's automobile sector had been witnessing a slowdown before the pandemic relatedrestrictions brought it to a near standstill. However the industry recorded a sharprecovery as soon as economic activities resumed in June 2020 and exited FY 2020-21 withtotal sales of 18.62 million units. However the auto components industry is likely towitness ~6-8% decline primarily due to subdued domestic as well as exports demand fromOriginal Equipment Manufacturers (OEM) and the replacement market.

Our performance

We recorded revenues of C912.65 crore and EBITDA of C72.91 crore with strong revivalin sales in the second half offset by the extremely weak demand scenario in theCommercial Vehicle (CV) industry as OEMs remain cautious in ramping up BS-VI production.The Medium & Heavy Commercial Vehicle market was down 21%. However we performedbetter than the industry due to market share gains and introduction of new value-addedproducts.

Incorporating latest technologies

We focused on the adoption and implementation of Industry 4.0 technology and our newCNC gear line enabled us to match global manufacturing standards. During the year wesuccessfully transitioned to make our products compliant with BSVI norms implementing allchanges required by our customers and embarked on a journey to implement Total ProductiveMaintenance (TPM).

During the year under review we installed specific CNC equipment in the productionline to meet new models and variants with an emphasis on improving productivity andresponding quickly to the volatile volume and variant demand. We also changed our plantlayouts significantly to create flexibility in our lines by adopting single piece flow andcell concepts in the shop floor. This enabled us to shorten production timelinessubstantially. This not only enhanced productivity but also improved our costcompetitiveness.

We completed the ISO: 45001:2018 Surveillance Audit successfully and also received theISO 14001:2015 Environment Management System certification.

Safety and business continuity amid pandemic

We took numerous measures to ensure a safe and healthy work environment for our peopleamid a raging pandemic. We also conducted awareness programmes on prevention andCOVID-appropriate behaviour for all our employees.

Our dedicated inhouse medical team engaged continuously with our employees providingmedical support counselling and other medical services. Further we have undertaken avaccination drive; 95% of our employees has been inoculated to date. Given the second waveof COVID-19 and the emergence of mutated variants we are maintaining all our COVID-19safety protocols at all levels across the organisation.

Community commitments

We see our people and communities as intrinsically linked to our business and progress;and therefore work towards enabling both through multi-lateral activities that buildcompetencies and empower them. During the year under review our CSR initiatives were morefocused on containing the spread of COVID-19 and ensuring the safety and well-being ofour communities. We donated a 'Lab Built on Wheels' to the Government of Karnataka whichwill facilitate the delivery of diagnostic services to the remotest locations. We alsopromised a second one in FY 2021-22. The lab meets all safety standards of a BSL2/3laboratory and is a first of its kind in the country.

We joined hands with the district administration of Mysuru along with Asha KiranaHospital and Gopal Gowda Shanthaveri Memorial Hospital to set up Meritor Kalyani Care inPrincess Krishnajammanni Super Speciality Hospital Mysuru. The existing structure hasbeen transformed to an ultra-modern ICU with oxygenated beds. The unit was set up andopened to public in record 18 days. We also installed an oxygen generator.

Looking ahead

As we move deeper into FY 2021-22 we expected 15-20% growth in volume and revenue ascompared to the previous year. Even though the second wave has thrown several challengesI am confident that our New Product Development (NPD) for various platforms would act as astrong foundation to propel our growth going forward.

We recorded revenues of G912.65 crore and EBITDA of G72.91 crore with strong revivalin sales in the second half offset by the extremely weak demand scenario in theCommercial Vehicle (CV) industry as OEMs remain cautious in ramping up BS-VI production.

We are focusing on optimising our resources and reducing cost through leanmanufacturing processes such as Total Productive Maintenance (TPM). We will continue togrow our market share by offering more reliable and higher quality products to ourcustomers using cutting-edge technologies and equipment for both housing line balancingand gear manufacturin g.

On behalf of the Board and the leadership team I would like to thank our customerssuppliers governments for their continued support. I would also like to specially thankour people for their tenacity resilience and endeavours helping us navigate throughthese testing times.

Warm regards

Dr. B N Kalyani

Chairman

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