The year 2016 was an eventful year across the globe marked with several unpredictabledevelopments. The political disturbances in the Middle East the Presidential elections inthe USA and Brexit phenomenon contributed to heightened volatility across the globalmarkets driven by worries of rising inward-looking policies. Back in India the scenariowas much better as we witnessed one of the most momentous events in years i.e.demonetisation that led to temporary disruptions in market and decline in consumptiontriggered by abrupt fund crunch. However its impact in the long run is likely to bebeneficial with massive amount of idle funds getting channelised into the system and thecountry maturing towards digitalisation and cashless transactions. The robustmacro-economic fundamentals and much-needed political stability in the country are apt tofacilitate business growth and infrastructural development. The inflation is stable andrepo rate is at multiple years low. On the whole the country is attractively placed onthe global maps and the likely implementation of the much-awaited Goods and Services Tax(GST) would further improve the scenario. The automobile industry which is in the middleof transformation driven by new regulatory norms and evolving consumer requirementwitnessed a moderate performance. Though the industry witnessed revival in rural demandit was more or less negated by the setbacks from demonetisation in the last two quarters.In spite of this the outlook for the industry remains positive on the back of favourabledemographics low vehicle density rising roads and highways network and surge inaffluent population.
Performance review 2016-17
In the midst of all this the Company witnessed some jerks in its two-wheeler andaftermarket businesses that led to a decline in the performance of the standalonebusiness. Nevertheless the might brought to the organisation through a combination ofvarious subsidiaries and joint ventures is what protected us at consolidated levels. On aconsolidated level the Company's top line grew 11.84% to
Rs 10123 mn while EBITDA and PAT grew 14.52% and 12.49% respectively to Rs864mnandRs384.37mnrespectively. The fact that we added several new customers and product linesduring the year makes this growth even more exciting. Relatively newer technologies ofauto transmission gear and electric shift by wire have found good traction among endusers much to the satisfaction of the OEMs. During the year we undertook a strategicdecision of closing down a unit in Aurangabad which was running on losses due to lack ofsignificant order from the customer. The said plant was closed by the Company aftercompletion of all applicable formalities including payment of all prescribed statutorydues and compensation as per the law. We have sold off a bulbs and wire manufacturingplant at Kala-Amb Himachal Pradesh on slump-sale basis owing to its insignificantcontribution to the growth of aftermarket division. Going forward the implementation ofGST and BS-VI emission norms would turn the tables in the Company's favour. GST wouldenable us to compete with unorganised players in the aftermarket segment driven by costreductions achieved from tax credit benefits. While the BS-VI emission norms that wouldrequire OEMs to undertake significant modifications in design it will pose significantopportunity for us owing to our JV with Cornaglia to meet the changing emission norms.
With the industry scenario getting more facilitative for us we are leaving no stoneunturned by undertaking a series of initiatives to enhance operational efficienciesreduce costs enhance quality control measures and strengthen relations with customersand suppliers. Our key strategies for the coming years shall be:
Focus on widening product lines and increasing customer base by identifying key areasof technology gaps where we can deliver requirements of the customers
Explore opportunities in the areas of sensor technology telematics and fleetmanagement which shall be the key business drivers in the coming years
Leverage the robustness of our business model that has enabled reduction in debt andmaximisation of cash flows to explore opportunities for technical collaboration andcapacity enhancement
Enhance proportion of automation at plants for higher operational efficiencies and costreduction
Take customer-centricity to higher levels through regular interaction and reviewmechanism with the senior level management to understand areas of improvement andrequirements and make them aware of our product offerings
Upgrading to tier I supplier in the seat frames and mechanism segment
Message to the stakeholders
On behalf of the Board we take the opportunity to thank all our stakeholders thebankers suppliers customers shareholders and investor community for their continuedsupport to us. We believe that as an organisation we have lived up to your expectationsduring all these years taking the Company to newer heights and making it a partner ofchoice for several leading OEMs.
In the last 10 years since our listing the price of Company's shares have grown sixtimes from Rs 75 in 2007 to
Rs 450 as on March 31 2017. In addition to this capital appreciation we haveevenprovidedaverageannualreturns of 44% in the form of dividends. We would like to assureyou that your Company is continuously working towards betterment and expect that thecoming years would be more rewarding. We would also like to thank our employees whoseconcerted efforts have brought us here. We are prepared as an organisation to take onchallenges and build a greater organisation.
|D. K. Jain ||Anmol Jain ||Deepak Jain |
|Chairman ||Managing Director ||Director |