Financial year 2017-18 has been a good year for Jamna Auto Industries Limited (JAI).During the year the business showed momentum as the overall CV industry grew at doubledigit.
Few years ago when your Company firmed up the medium- term 'Project Lakshya' we laiddown the roadmap to achieve our vision of 'Leadership in Global Suspension Solutions'. Weare happy to reportthat in FY18 your Company exceeded the 'Lakshya' of '33% revenue fromnew products'. In FY 18 revenue from new products was almost 37%. As the OEM industryadopts new-age technologies your Company is witnessing increased penetration of parabolicsprings. Further JAI's lift axles are witnessing increased offtake. I will also like toinform you that your Company is now in the process of coming out with new products i.e.Stablizer Bars U-Bolts and T railer Suspension.
Your Company is also making focused efforts to achieve another 'Lakshya' of 33% revenuefrom new markets. In FY 18 revenue from new markets was around 15%. After-market is a hugepotential market and is viewed as an exciting growth opportunity. By broadeningdistribution networks and with new marketing strategies JAI is fast expanding its after-markets - domestic as well as exports. Your Company is truly poised to achieve the goal of'33% revenue from new markets'.
Brand-building and promotion were in full swing during the year. Your Companyparticipated in the best of events held by auto-component industry. There has been anincreased focus on branding and marketing with the "JAI Vistar" initiative withloyalty programs for mechanics - "Jai Ho" scheme retailers - "JaiSarathi" scheme and distributors - "Jai Rising Star" scheme. Currently morethan 10000 mechanics and their families are being benefitted by the "Jai Ho"scheme. Your Company aims to connect with more retailers distributors and mechanics on apersonal level. Your Company has a very strong PAN India after-market network comprisingof 11 depots 300+ distributors and 6000+ retailers supplying 5000+ parts and cateringto 10000+ mechanics. In order to promote the ease of doing business supply chain systemhas been integrated with a state-of-the- art ERP system. Your Company also expects higherdemand and a greater market share in domestic after-market post GST implementation.
Your Company also plans to expand base in the after markets through sales of springallied products lift axle and air suspension parts apart from existing products range.
Quality has always been paramount for JAI. During the year your Company's plants atMalanpur and Yamuna Nagar were awarded the esteemed TPM Excellence Category 'A' award byJapan Institute of Plant Maintenance.
Apart from diversification of products and markets your Company has also beenexpanding its manufacturing base JAI's 9 plants are strategically located next tocustomers - whether it be OEM or after markets. In continuation to your Company's strategyof staying close to customer hubs your Company is planning to set up two more plants -one at Pithampur near Indore Madhya Pradesh and the other at Adityapur near JamshedpurJharkhand. Land for both these locations has been allotted.
Your Company is increasing the capacity through setting up new plants andmodernising/upgrading its existing plants. These expansions and modernisation is fundedthrough internal accruals. Post completion of these activities the capacity would increaseby around 20%.
Your Company endeavours to continuously reduce its break even point throughmodernisation upgradation shift in product mixand other cost reduction measures.
R&D is a constant endeavour at JAI. Your Company has a R&D centre in Pune. Itis the only in-house spring & suspension R&D centre in India and the facility hasbeen approved by the Department of Scientific and Industrial Research. Following years ofstudy and new specialised equipment your Company has developed capabilities to design andproduce complete suspension systems from black box stage indigenously. The R&D centrehas state of art test facilities with capability of testing the entire suspension systems.
Diversification at your Company is accompanied by strong financial progress. In FY 18revenue grew at double digit around 34%.
Your Company's credit rating has been reaffirmed by ICRA as A1+for Short-T erm and AA-for Long-T erm debt.
In accordance with the 'Lakshya' for FY18 your Company has maintained the dividendpayout ratio of 33% (inclusive of dividend distribution tax) and achieved RoCE of morethan 50%.
I would also like to touch upon a very important aspect of the organisation: ourpeople. The outstanding team which works day after day across levels divisions andgeographies are quite literally the pillars of JAI's foundation.
Finally I would like to express my gratitude to all our stakeholders speciallycustomers for their continued trust in our ability to support them and bring value totheir businesses and to our collaborators for helping us with their support to ourcustomers and keep our promises to them.
I would also like to thank all local state and national governments the associatedbodies and banks and financial institutions for their strong support
Bhupinder Singh Jauhar