According to the Department of Industrial Policy and Promotion (DIPP) India'sautomobile industry attracted Foreign Direct Investment (FDI) valued at USD 20.85 billionduring April 2000-December 2018.
We are happy to share with you our Annual Report for FY 2018-19. Bharat Gears deliveredgood performance during the year as we made steady progress in transforming the Companyinto a leaner and more customer-focussed player. It was indeed an eventful year as we haveclocked 16% growth for the year.
As per World Economic Outlook (WEO April 2019) India's economy is projected to havegrown by 7.1% as compared to 7.2% in previous year even as it continued to retain itsposition as the world's fastest growing major economy supported by continued recovery ofinvestment and robust consumption. Structural economic reforms such as GST anddemonetisation led to positive changes in the key metrics of the economy. Growth isprojected to be around 7.3% and 7.5% in FY 2019 and FY 2020 respectively withinvestment picking up and consumption remaining strong.
Continued implementation of structural and financial sector reforms with efforts toreduce public debt remain essential to secure the Indian economy's growth prospects.Industrial production has been improving due to stronger growth in manufacturing output.It was supported by growth in output of construction goods and higher production ofcapital goods.
Global economic expansion decelerated in FY 2018 following a broad-based upswing incyclical growth. Its momentum has slowed due to trade conflicts rising interest rates andvolatility in the commodity markets. Global growth is projected to decline from 3.6% inFY 2018 to 3.3% in FY 2019 (WEO April 2019).
India's Auto Sector
According to the Department of Industrial Policy and Promotion (DIPP) India'sautomobile industry attracted Foreign Direct Investment (FDI) valued at USD 20.85billion during April 2000-December 2018.
In view of the growing demand the Indian Government is relentlessly focussed onbuilding world-class infrastructure. It is working towards developing India as a globalmanufacturing centre and a hub for R&D. It has made significant allocations in UnionBudget 2019-20 and the 12th Five-Year Plan towards these initiatives. These areexpected to create huge demand for construction equipment which will translate intogreater demand for our products.
The gross turnover of the Company increased by 16.40% from र 514.74 Crores in FY2018 to र 599.15 Crores in FY 2019. The gears business grew by 15.22% in FY2019 at र 523.99 Crores up from र 454.76 Crores in FY 2018. The Company hasachieved a net profit of
र 12.53 Crores as compared to a net profit of र 6.30 Crores in the previousyear.
As a result of the strong momentum in the automobile sector especially in agriculturea higher demand was witnessed across all the segments. The demand was particularly highfrom OEMs and overseas customers. The replacement market also posted growth postdemonetisation and implementation of GST.
We continued to focus on our investment in technology upgradation and processinnovations to remain a leader in adopting the latest technology in gear manufacturing.Through retro-fitting and refurbishing of machines we enhanced our productivity andimproved efficiency. Today these work as our competitive advantages in the marketplace.Further in order to cater to the ever-growing demand both domestically andinternationally we continued to invest in our manufacturing capabilities. We have takenup significant capital expansion programmes over the last two fiscals.
Enhancing Product Range
During the year we successfully enhanced our product range with existing customers.Our product range comprises various gears and shafts along with spiral bevel gears anddifferential gears. We have also developed multiple CW&P ratios for a new HCV model ofone of our key customers. These initiatives are enabling us to increase our presence inthe world's top three tractor markets and also have a positive impact on exports like ZFGermany and Eaton USA. Your Company has also initiated discussions with new customers forunexplored product types such as laser hydraulic parts.
We remain well-equipped to the cater to the increasing growth opportunities. Ourexports mainly to North American and European Markets have been growing at a steady rateand enabling us in maintaining volumes in depressed market conditions. We are targeting atbecoming a global player with a presence across more countries and an increasing clientbase.
We are continually striving for continuous product development and innovative methodsto enhance our manufacturing capabilities and cater to the stringent quality requirementsof our customers.
Going forward our target is to reduce our dependence on the agricultural segment byexploring business opportunities in other segments. This is aimed at minimising the riskof segment concentration. Towards this aim we plan to add more business in the Automotiveand Construction equipment segments.
Our ability to understand client goals and unsurpassed quality cements us as India'slargest automotive gear manufacturer. Today we are the preferred supplier of automotivegears for heavy medium & light trucks utility vehicles tractors & off-highwayvehicles.
Finally I would like to take this opportunity to thank our bankers NBFCs businessassociates and all stakeholders for their faith in Bharat Gears. I would also like toexpress my gratitude for the valuable advice provided by my colleagues on the Board andthe management team.
I would like to convey my appreciation for the staunch dedication of all employeesacross locations. Last but not the least I would like to thank our clients for theirunwavering support.
We are constantly endeavouring towards delivering high-quality products with latesttechnology ensuring qualitative growth and a solid and sustainable future.
Surinder Paul Kanwar
Chairman & Managing Director