I am delighted to share that your Company was featured among the top 10 gearmanufacturers of the country by Industry Outlook Magazine in the May 2021 edition.
CHAIRMAN AND MANAGING DIRECTOR.
IT IS MY PLEASURE AND PRIVILEGE TO PRESENT TO YOU THE 50th ANNUAL REPORT FORFY 2020-21.
DURING THE YEAR GONE BY THE WORLD WAS GRAPPLING WITH THE COVID-19 PANDEMIC AS ARESULT OF WHICH NATIONS WENT INTO LOCKDOWNS IN MULTIPLE PHASES.
THIS HAD A DISASTROUS IMPACT ON ALL THE ECONOMIES ACROSS THE WORLD.
India too mandated a strict lockdown and social distancing norms to prevent the spreadof the virus. This disruption to economic activity resulted in a 7.3% contraction in GDPfor FY 2020-21 for our country. In my opinion the lockdown was imperative at a macrolevel as the country needed adequate healthcare facilities to combat COVID-19. Howeverat a micro level managing the situation wherein the country went into an overnightlockdown was a challenging task.
As a company we were expecting FY 2020-21 to be much better than FY 2019-20. Howeverthe financial year started with a lockdown and our only thought as a company was tosurvive through this unprecedented crisis while ensuring that all our employees were safeand not stranded anywhere. We even managed to arrange for the basic necessities for ourworkforce as and when required during the lockdown period. Furthermore your Companyorganised a vaccination drive for our workforce in April 2021 at two of our facilitiesand ensured that all the employees are adequately vaccinated.
At the industry level supply chains have been disrupted drastically due to COVID-19 inthe last one year. Input costs went up by over 40-50% and sales of commercial vehicles hasbeen consistently down for two straight years - FY 2019-20 and FY 2020-21. However thedemand for agri-implements and tractors in FY 2020-21 were on an increasing trend.
With a disrupted supply chain increase in raw material and other input costs and ahigh demand for tractors as an autocomponent manufacturer it was not an easy situationto deal with. However we motivated our workforce and took the challenge head-on and I amhappy to share that despite all the impediments your Company was able to perform betterthan the previous year. We ensured that our liquidity position remained strong enough toface any challenge.
While our most significant development has been to survive and perform much better thanFY 2019-20 despite battling COVID-19 along the way we have been able to achieve a lotmore. Your Company was able to successfully operationalise the warm forging project andstart regular business for the newly developed Bevel gears and Bevel kits. We alsoupgraded our design and development facilities by installing 3D Scanning Machines andPrecision Die Making Machines for forging developments. Furthermore we have converted allour conventional machines to CNC machines moving to the latest manufacturing technologyand upgraded our heat treatment facilities as well. Through dedicated marketing andcommunication efforts your Company was able to add new customers in India and abroad overthe last one year despite disruption in supply chains.
I am delighted to share that your Company was featured among the top 10 gearmanufacturers of the country by Industry Outlook Magazine in the May 2021 edition. Anothersignificant achievement of last year has been our move towards green energy by installingroof-top solar power plants of 500kw and 175kw respectively at two of our manufacturingfacilities. This will also help the Company save on power cost. We also plan to instalroof-top solar power plants at all our other manufacturing facilities in the next coupleof years in our endeavour to move towards clean energy.
Due to COVID-19 the future of the economy looks uncertain. Inflation is at all-timehigh and commodity prices are on an upswing too. On the exports front there is an acuteshortage of shipping containers today for most countries across the world and as aresult shipping freight rates have skyrocketed. However the manufacturing sector isanticipating a big boost from the 'Atmanirbhar Bharat' mission of the Government.Accordingly I am quite optimistic that the manufacturing sector will perform better andcontribute more towards the GDP of the country. With all these developments the industryshall be able to move forward in a more sustainable manner.
India is also likely to benefit as multinational companies make an entry into ourcountry and create a new supply chain based out of India. For instance Tesla has alreadyentered
India and is planning to set up a vehicle manufacturing facility in the country. Thiswill give a huge boost to the automotive segment. I believe that India is going to becomea mega auto-component hub for the world in times to come.
Your Company is very uniquely positioned as we cater to two major automotive sectors -Farm Equipment and Commercial Vehicles along with having a footprint in defence andexports. We also cater to the needs of the replacement market in the Indian sub-continentwith a wide range of products. In India and abroad your Company is considered to be atrustworthy name among all its customers. Your Company is constantly adding new productsas well as new customers which shall have a positive impact on the performance of theCompany in the future.
Looking ahead I envisage abundant growth opportunities for your Company. With theGovernment's thrust on doubling farmers' incomes by 2024-25 a number of new opportunitiesare arising which in turn will help your Company to constantly innovate and develop newproducts for the market.
The commercial vehicle segment has been slow since the mid-2019. However as per marketreports it is expected that the industry should do better in the next 2-3 years. TheGovernment's push towards infrastructure spending and the introduction of the scrappagepolicy for old vehicles is likely to give a boost to the commercial vehicle segment andyour Company is definitely going to benefit from it.
From a long-term perspective we look forward to expanding our export portfolio andmoving up the value chain by focussing more on developing new components sub-assembliesand assemblies. Due to our strong manufacturing capabilities we are now also aiming todevelop new customers in various other segments not related to the automotive sector inthe domestic as well as overseas market.
I would like to take this opportunity to thank all our stakeholders who have enabled usto sustain our performance and sail through in these difficult times. With the continuedsupport of all the stakeholders your Company is fully geared for the future and looksforward to reaching greater heights.
Thank you once again.
Stay safe and stay healthy!
CHAIRMAN AND MANAGING DIRECTOR.