Dear Shareholders
It is indeed a pleasure to share with you the performance of yourCompany for FY 2021-22.
It was another significantly different year which was marked bymultiple challenges. A year which tested the resilience and ingenuity of Team TII tonavigate adverse landscapes and to forge ahead stronger - to explore new frontiers.
The year was marked by the Company building a portfolio ofdifferentiated import-substitute products deepening its customer engagement expandingits market presence across new geographies strengthening its manufacturing capabilitiesand recording a creditable performance.
Global Economy
The year saw the emergence of a VUCA (Volatility UncertaintyComplexity & Ambiguity) world which threw many surprises re-framed many paradigms.The resilient revival of the global market with the receding of the pandemic was negatedby the surging second wave of the virus and its toll on economies and human lives acrossthe world. The period of respite that followed the waning of the virus was again shatteredwith the emergence of the Omicron variant though fortunately less virulent. Thegeopolitical tensions which exacerbated by the escalation of hostilities between Russiaand Ukraine changed the global growth narrative with supply chain disruptions haltingproduction lines rising raw material commodity and fuel prices triggering inflationarypressures on stressed economies and tightening of financial channels creating marketmayhem.
Global GDP decelerated from 6.1% in 2021 and is estimated to plateau at3.2% in both 2022 and 2023 leading to ‘stagflation' or a period of stagnationand inflation.
Indian Economy
The Indian Economy was also adversely impacted with a slowdown ininvestments and industrial growth muted customer demand and rural offtake low tractionin contact-sensitive services and closure of small businesses leading to loss oflivelihoods.
The revival of the economy in the second quarter of the year with theresumption of operations and uptick in investments and consumption saw a setback with theemergence of the Omicron variant the surging fuel and commodity prices and inflationarypressures denting growth.
Reserve Bank of India has pegged India's GDP growth at 8.9% for2021-22 while revising its earlier estimate from 7.8% to 7.2% for 2022-23.
On the positive front key economic indicators reflect the revival andresilience of the Indian economy showing a rebound on the back of supportive Governmentpolicies. The ambitious roadmap outlined in the Union Budget 2022-23 for India'seconomic growth entering ‘Amrit Kaal' augurs well for the Auto and Autoancillary industries and for sustained economic growth - the ‘Gati Shakthi'programme with large outlays in rail road mass transport and logistics infrastructurethe rural development programmes to enhance farmer prosperity productivityincentivisation programmes and sunrise opportunities in energy transition and climateaction.
At TII each of the businesses has mapped out strategies to explore thepotential of this growth opportunity.
The automotive component industry in India in FY 2021-22 according toACMA (Automotive Component Manufacturers Association of India) witnessed robust growthrepresenting a 66% increase from April to September 2021 compared to the previous year.Component sales to OEMs in the domestic market grew by 76% while the Aftermarket increasedby 25%. Exports also recorded a significant increase of 76%. Auto component exports areexpected to grow at 23.9% annually to reach US$ 80 Bn by 2026.
The resurgence in demand for vehicles was however hampered by supplyconstraints of semiconductors rising input and logistics costs and non-availability ofcontainers. ACMA had estimated a revenue loss of `1000 crore due to chip shortage by theend of the financial year 2021-22.
At TII each of the businesses countered the challenges of thevolatility in the market and spiralling raw material costs with internal efficienciescustomer co-partnering new product development and process optimization. As part ofcapability building a new Tube Mill was commissioned at Chennai and an Assembly facilityfor Auto Chains at Aurangabad.
The Company also embarked on its Lean Manufacturing journey during theyear.
We have over the years shared our vision of a clear growth plan for TIIthrough the TI-1 TI-2 and TI-3 strategies. One such strategic step-out was theacquisition of CG Power and Industrial Solutions Ltd (CG Power) in fiscal 2021. After thefirst full year of operations under the new TII Management CG Power has seen a completeoperational and financial turnaround achieving a turnover of `5159 crores with a PBT(before exceptional items) of `502 crores.
One of the growth engines that we identified was clean mobility and wehave incorporated a wholly owned subsidiary viz. TI Clean Mobility Private Limited(TICMPL) to pursue and engage in clean mobility and in the Electric three-wheeler space.
During the year TI Clean Mobility Private Limited (TICMPL) acquired a70% stake in Cellestial E-Mobility Private Limited a manufacturer of Electric Tractorsas part of the Clean Mobility alignment. This augurs well with our plans to look at growthavenues.
We have also decided to foray into newer businesses in Medical Devicesand Electronics in the near future.
I strongly believe that TII as an organisation has immensepossibilities for greater growth. The Company will continue to leverage its strength andmarket leadership and going forward work on collaborative ventures with its subsidiariesfor greater efficiency gains.
In our journey for greater growth our people force has been a greatasset. Goal-driven teams across the Company have demonstrated great resilience and passionto take forward the blueprint of a new future.
I would like to congratulate Vellayan Subbiah as he takes on the mantleof Executive Vice Chairman of TII. I am sure his visionary leadership will take TII to thenext quantum leap in growth.
Mukesh Ahuja has joined the Board as Managing Director. Over the yearsat TII he has managed different roles and positions across multiple functions includingas President - Engineering business. We believe his experience will enrich the Companygreatly as he transitions to his new role.
Two new members were inducted to the Board as Independent Directorsduring the year. Ms. Sasikala Varadachari who joined the Board in June 2021 brings withher over four decades of rich experience in banking and financial services. Mr. TejpreetSingh Chopra who was appointed to the Board in March 2022 has multi-industry experiencesteering large companies such as GE Electric and serving on the board of variouscompanies.
Ms. Madhu Dubhashi Director retired in August 2021. We at the Boardthank her for her valuable services and contribution as a senior member of the Board.
Mr. Mahesh Chhabria Director of the Company resigned during the year.The Board places on record its appreciation of the distinguished services rendered by himduring his term.
I thank the Members of the Board who continue to be a source of supportand encouragement to me and to the management team. I also take this opportunity toexpress my gratitude to all of you our customers stakeholders bankers and suppliersfor your continued support. Last but not the least I would like to express my sincereappreciation and thanks to all our shareholders for their continued support and trustreposed in us.
This is truly an exciting time to be part of TII as it takes the stepsto explore new frontiers to become a globally admired Company.
