It gives me immense pleasure to present to you the FY 2018-19 Annual Report. Despitechallenges we remained committed to create enduring value for our business by building anorganisation that is increasingly resilient and future-ready.
As one of the leading players in the automotive component industry we are reinforcingour position by strengthening our product-mix global synergies operating efficiency andcustomer service. By leveraging the strength of our manufacturing facilities and extensiveR&D we continued to develop innovative automotive solutions.
The Macroeconomic and Industrial Scenario
India's growth rate continues to be fast paced among the world's major economies.Despite global headwinds the economy continued to grow at close to 6.8% followingwide-ranging reforms undertaken by the Government of India in the recent years. The growthrate softened during the year owing to a slowdown in private consumption tepid increasein fixed investments muted exports slowdown in agriculture and automotive sectors.However the rising liquidity concerns in the NBFC sector are being addressed by theGovernment and the RBI.
Government's structural initiatives towards improving the Ease of Doing Business helpedIndia secure 77th rank from 142nd rank in 2014 in the World Bank's Ease of Doing BusinessReport. Also the Government's thrust towards developing infrastructure fasterurbanisation and gradual revival of the rural economy will further bolster economic growthin the coming years. According to Government estimates the country is poised to become aUS$ 5 trillion economy in the next five years.
For the automobile sector FY 2018-19 came with a mixed bag. The industry growthmoderated on account of significant increase in insurance expenses fuel costs andliquidity tightening in the second half of the year. Despite the challenges the Indianautomotive industry expanded by 6.26% to reach 30915420 (units). The year marked thefastest pace of growth in domestic sales in the commercial vehicles segment at 17.56%Y-o-Y followed by 3-Wheelers at 10.27% Y-o-Y. India became the world's 4th largest carmarket by displacing Germany to 5th position.
Additionally the Indian automotive industry (including component manufacturing) isexpected to reach Rs. 16.16-18.18 trillion by 2026. Domestic 2-Wheeler industry isexpected to grow at 6-8% during FY20. The Government of India expects automobile sector toattract US$ 8-10 billion in local and foreign investments by 2023.
Growth of the automotive components industry is aligned with the burgeoning automobilesector. It contributes 75% of the total sales generated in the country. The autocomponents industry currently at $ 51.2 billion is expected to register robust growth inthe coming years backed by healthy demand from OEM and exports.
The automotive industry is witnessing transformation with changing trends andregulations. Disruptive technologies strict regulatory environment newer mobilitypatterns and evolving customer preferences are setting new standards in the automobileindustry in India and across the globe. Currently the automotive sector contributes morethan 7% to India's GDP. The Automotive Mission Plan 201626 sets an aspiration toincrease the contribution to 12%. Through the Automotive Mission Plan the NationalElectric Mobility Mission Plan (NEMMP) and other initiatives the Government seeks tofacilitate long-term growth in the industry and reduce emissions and oil dependence. Alsothe Government seeks to bring fuel efficiency by switching from BS IV to BS VI standard.With impetus on new regulations shared mobility concept introduction of e-vehiclesIndian automobile industry is set to grow ahead in the coming years.
I am happy to report to you another successful year for Talbros. The Company recorded a23% growth in turnover despite a relatively sluggish industry growth. This strongperformance is well-supported by our world-class capacities across product categorieshedged product portfolio and strong client relationships. This has helped us report higherthan the industry growth. The collaborations with the technology leaders have enabled usto evolve as an auto component supplier to OEMs globally. We expect FY 2019-20 to be achallenging year for the Auto Industry however at Talbros we are future-ready with BS-VIcompliant product portfolio which will ensure growth momentum going forward.
Our consolidated total income from operations increased from Rs. 392.98 crores in2017-18 to Rs. 482.85 crores in 2018-19. Profitbefore exceptional items improved 32% fromRs. 25.90 crores in 2017-18 to Rs. 34.14 crores in 2018-19. Profitafter tax improved 15%from Rs. 22.90 crores in 2017-18 to Rs. 26.38 crores in 2018-19.
Our business is broadly divided into a standalone business of gaskets forgings andthree joint ventures.
Our gasket business continued to hold 40% of the Indian gasket market share. Thebusiness witnessed 10% revenue growth backed by rising demand from the two-wheelercommercial vehicle and tractor segment. During the year we procured orders to supplyIntegrated Wire Harness Gasket to OEM for which the supply is expected to start fromFY21. Our order book strengthened with new business from European OEMs. We entered intostrategic raw material sourcing agreement with subsidiary of an overseas supplier to bringsavings in operational costs reduction in raw material inventory and working capitalrequirement. This will enable us to compete strongly in the auto component industry.
The forging business gained momentum in both domestic and overseas market with all timehigh sales and 44% growth during the year. We received orders from premium domestic OEMplayer. We started supplying forging solutions to renowned European OEM and won businessorders from premium European OEMs. Our new forging line of 2500 ton press is underinstallation which will reinforce our manufacturing capabilities. With strong technicalexpertise and skilful team we developed and supplied various components to OEMs. We areleveraging our relationships with OEMs in India and overseas to increase our presence andmaintain a healthy order.
Our JV company Nippon Leakless Talbros Private Limited (LTL) also displayed a balancevolume on account of sales to renowned ORMs.. The revenues stood at Rs. 122 crores duringthe year.
Our second JV Company Magneti Marelli Talbros Chassis Systems Private Limited (MMT)reported 16% growth in revenue during the year mainly backed by strong volume and improvedmargins. We received orders from Maruti Suzuki India Limited (MSIL) and from Tata Motorsfor supplying components for their next launch. We secured export orders from largeEuropean car maker for its existing and upcoming car models. Our commitment to supply highquality products with strong customer relationships have enhanced our visibility in theglobal markets.
Our third JV Company Talbros Marugo Rubber Private Limited (TMR) registered 24% growthin revenue on account of increase in sales mounting mufflers molded hoses and extrudedhoses to Maruti Suzuki. We continued to receive orders from existing customers and in theLCV and HCV segment. We secured new order from SML Isuzu. With a firm order book we areactively exploring further opportunities.
We are looking forward towards building an enduring organisation about resilience andcourage to face adversity along with wise strategies and clear vision. With Government'spush expected to facilitate domestic investment and growth in the coming years we remainpositive on the opportunities unfolding in the India's automobile industry. Looking aheadwe will continue to serve our customers with quality and commitment.
As closing thoughts I would like to thank our team for their passion and commitmentand our highly experienced management for their continued guidance. I am also thankful toour customers bankers and financial institutions for their continuous support. With thisbacking we will continue to serve as a trusted partner to all our stakeholders byresponsibly taking the business to new heights.