Sardar Bhupinder Singh Jauhar our Founder and Chairman breathed his last on the 31stJuly 2021. During his 60 years association and involvement in the automotive industryand Jamna in particular his vision values and guidance have made Jamna Auto a marketleader in the CV suspension segment. Our entire team mourns his loss and reaffirms ourcommitment to his vision to take the company to new frontiers of success.
At the outset I would like to offer my thoughts and prayers to all those who have beenimpacted by Covid-19. The outbreak of the pandemic caused wide-ranging dislocation andduress and we too were not spared from its repercussions. As the world suffered a once ina century public health crisis economic activity collapsed supply-chain networks weredisrupted and trade channels saw a complete immobility in operations. General societyacross the world was overwhelmed with shock and paralysis. After an acute period actually2 periods of suffering humanity responded with vigor compassion and technology.Validating the saying great pain engenders great creativity the last heart breaking 18months also were a nursery of innovation and improvisation. At Jamna Auto Industries(JAI) every and each member of our family united to fight and overcome these challenges.Be it strict adherence to covid guidelines ensuring and subsidising vaccination helpingthe needy in our nearby areas we lived the values of our dearest departed founder ofpeople first. But we also transformed ourselves by:
1. Reducing our breakeven point through cost reduction
2. Higher revenue share from value added products and markets and
3. Reduction of our debt.
I'm proud to say this outstanding team work has resulted in reducing our break-evenpoint to less than 25% of our capacity; achieving a free cash of H 190 crore all of whichhelped in de-leveraging of our Balance Sheet. I am pleased to share our performance forthe year under review:
Financial and Operational Performance
1. PBT improved to H 100.88 crore in FY 21 from H 71.64 crore in the previous year.
2. Total dividend payout is 41% of PAT against our Lakshya target of 33%.
3. ROCE for the year stood at 23% (past 5-year weighted average is 38%). Our Lakshyatarget was 33%. Delivering higher ROCE will continue to be our top priority.
4. Revenue from new markets is 29 % against Lakshya target of 33%.
5. Revenue from new products is 34 % against Lakshya target of 33%.
JAI strategy is to serve diverse markets to achieve its growth objectives. In thisdirection we have taken several steps to increase our market share in DomesticAfter-Market and Exports. With these initiatives we have successfully created a structureof SCM and channel partners to supply varied products pan India. We have achieved limitedsuccess in increasing our after-market sales and there exists further potential toincrease our sales. Since we have already created a distribution network we will reap thebenefits going forward. We are further complimenting our actions by doing direct retailingand digitizing the entire After Market operations.
We have been launching a range of new products every few years which has increased ourpercentage share of revenues from new products. Jamna Auto has launched the following newproducts:
1. Stabilizer bars
2. Full range of suspension for Trailer market including Mechanical Air suspension andLift axle
3. Allied Products for Spring and Lift Axle in After Market
The company is also launching new products like Machining Products UBolts HangerShackle and Spring Pins at our subsidiary facilities in Pant Nagar Uttarakhand andIndore M.P. The Pant Nagar unit is expected to start commercial production by FY 22. TheIndore project which was delayed due to Covid-19 is expected to start commercialproduction by FY 23.
Jamna Auto has a strategic collaboration with Ramco Systems which presents us with newdigital competencies. Now all the processes of After Market India are digitised. Todaymanagement reviews data analysis performance management is done through our IT system.In the current year we have begun implementation of Ramco system across all our plants. Wehave successfully implemented Ramco ERP system in Yamuna Nagar plant and now Chennai plantis in progress. We are confident that we will be able to implement Ramco ERP across theGroup by FY-24.
Employees are the cornerstone of our company and their health and safety remain ourtop priority. During this difficult Covid-19 times we ensured the safety and well-being ofour employees and their families. During the year under review the Company decided togrant stock options to key employees.
We hope this will motivate them for a successful and seamless execution of the new 5year Lakshya 50XT plan.
JAI has launched various high technology products like Parabolic Springs and Lift Axlesin the past. Our
R&D team has developed Extralite Springs using technology from Tinsley Bridge Ltd.- U.K. These Extralite Springs are currently under validation. We also plan to introducecold processed U-Bolt using superior manufacturing and design technology. Going forwardtechnology will be a key focus area for us.
Lakshya 5-year plan
We continue to build JAI for the long-term. The launch of our first 5-year plan named"Lakshya 50XT" is a reflection of that commitment. The key objective of thisplan is to achieve future growth and to de-risk business through market & productdiversification.
The 4 key targets for FY 26 are as below:
1. 50% Revenue from new markets.
2. 50 % Revenue from new products.
3. 50% Return on Capital Employed
4. 50% Dividend pay-out
The Lakshya 50XT is focused on exports and technology products which is explained indetail on pages 08 & 09. I would like to express my deepest gratitude to the Board ofDirectors employees customers and other stakeholders for their continuous faith andtrust in us.
|Randeep Singh Jauhar |
|14 August 2021 |