Industry Structure and Developments.

Your Company is one of the leading and pioneer players in the forging industry having varied product portfolio with a capacity of 18,600 MTPA to cater in a domestic as well as international markets such as Canada, Germany, France, the Netherlands, Belgium, uk, Australia, oman, Kuwait, Qatar, uaE, argentine, Indonesia, Italy, Malaysia and South korea.

Your Company had successfully completed expansion plan with a clear strategy to create higher return for our stakeholders in forthcoming years.

We have developed various innovative strategies in order to operate efficiently and grab the opportunity knocked by sector development and change in policy of Government.

Moreover, the Company has also strong reputed clients which includes nuclear Power Corporation, BHEL, Bharat Dynamics, IOCL, Godrej & Boyce, L&T, Indira Gandhi Centre for Atomic Research and Defence Research Development organisation and internationally, national oilwell varco, General Electric, voith, Andritz and Samsung Engineering, WEG etc.

Growth in sectors i.e. oil and Gas, Power, heavy Engineering, Ship Building, Defence, Aero Space will continue to rise. the demands of our forging products both in domestic and international markets will continue which in turn will aid us operate at high efficient level.

Global Forging Industry

Global forging industry will grow at a CAGR of 9.73 percent over the period 2014-2018. Many of the low-cost countries in the APAC region and Eastern Europe have emerged as preferred destinations for companies operating in the Global forging industry.

With the reduction in oil prices globally there will be some softening in terms of capital expenditure especially in areas where cost of extraction of oil is in much higher than what the current prices are. furthermore, there is a positive effect to lower oil prices both for the us economy as well as economies such as Indian and many other economies that import fuel and their positive effect will help generate higher demand in forging product.

Indian Forging Sector

Indian forging players mainly cater to the markets of the developed world in Europe, the US and South America. The total turnover of the Indian forging units is approximately Rs. 20,000 crore, and exports account for 25-30 per cent of revenues.

out of annual capacity of 3.8 million tonnes, the forging industry has been utilizing only about 2.3 million tonnes.

technological up gradation is imperative to beat competition from cheaper imports in the domestic market and create a niche international market. Hand-holding in the form of an interest subvention or a technology up gradation fund can help the industry achieve a higher growth rate.


the growth is expected to be encouraged by exports which could be worth uSD 20-27 billion by 2015-16. By these estimates a conservative estimate (16-22 per cent) of the production of forgings by 2015-16 would be to the tune of uSD 6 billion and above.

Demands drivers

development in defence, oil and Gas, Shipbuilding industry driving forging demand, production is expected to hit 140 MT by the end of 2016, while consumption is expected to grow 6.8% to reach 104 MT by 2017.

Industry concerns


Impact of rising rupee on export realization. Inadequate investment in technology up gradation. Cost competitiveness adversely affected due to constant cost escalation.

Fiscal and Monetary policy of Government. Compliance with stringent norms.

Manufacturing quality

SFEL, which celebrated its 25th anniversary last year, has taken a leap forward to intelligent manufacturing. We focus on interconnect processes having total production capacity of 18,600 MTPA in addition to improving quality, which eventually translates into providing their customers with better service.

Sanghvi Forging and Engineering Limited

our company is leading player in the heavy engineering goods segment and manufactures high-value heavy engineering goods using high and end technology.

Major business Sectors

Power defence oil & Gas Wind Mill Ship Building dies & Molds

• Machine Building

Strategy and Methodology

our strategy is well on track as we delivered on our goals of consistent, competitive, profitable and responsible growth. We remained focused on strengthening the core of our business through innovation, leading market development and continuous improvement of our executional capabilities.

our business model starts with our core purpose which is a clear expression of what we believe to be the best longterm way for Sanghvi forging and engineering Limited to grow. It is a simple purpose to help us meet changing consumer preferences and the challenges of a volatile, uncertain, complex and ambiguous world.

Make in india

Make in India, has seen an overwhelming response since its launch, just a few months ago. Make in India, which focuses on attracting businesses to invest and manufacture in India, aims to make India a global manufacturing hub, while bringing about an economic transformation in the country.

Increase in defence production for army, navy, air force, space fields combined with power, oil and petrochemicals sectors are expected to result in increase in demand for our forgings.

opportunities and Threats


the New Indian Government has a bright outlook for the Forging Industry in terms of growth. one of the reasons for growth in the industry is the liberalisation of the FdI policy in India which will meet the global demands of forging Products. Your Company intends to follow the new Government policy for forging industry and participate in overall economic growth of the country.

With the increase in GdP (Gross domestic Product) of oil & Gas, Power and Steel industries, the demand for our products will continues rise.


input price: the main raw material for the forging industry is steel, while the other major cost heads are energy and consumables. One major challenge that has been impacting the industry is the unstable price of steel and rising price of fuel and power. this has made business unviable as the burden of rising prices cannot be passed on to customers.

competition : Presence of number of Local Players creates competition in the markets. Competition is intensifying

from foreign players who have certain advantages in terms of high spare capacity, technology, workmanship, quality, delivery commitment, low interest cost, etc.

currency depreciation and finance cost depreciation in Indian Rupee, pretty sharp and almost sudden, happened in last few months has been hitting like a double whammy and accentuating inflation/cost pressures in business arena.

Combination with higher input costs, interest charges will exert a heavy pressure on margins.

Business Segmental Review


despite the challenging environment, we have delivered another year of strong performance with broad-based growth ahead of the market and sustained margin improvement. We remained focused on strengthening the core of our business through innovation, leading market development and continuous improvement of our executional capabilities. our strategy is well on track as we delivered our goals of consistent, competitive and responsible growth.

Pillars of Future Growth

Impact of "Make in India" activities by Government of India.

Heavy marketing efforts including participation in National and International exhibition.

visits of large numbers of International buyers for assessing our capabilities for their orders.

Quality approvals received from major buyers.

• Commencing of Polymer Quenching Tank.

Road ahead

India is expected to become the world's second largest producer of crude steel in 2015-16, moving up from the fourth position, as its capacity is projected to increase from 100 million tonne (MT) to about 112.5 MT in 2015-16. "All indicators suggest that India will soon move up to the second position both in production and consumption,"

Divisional Highlights


FY 2014-15 revenue from Sales increased 61.04% to Rs. 8737.61 Lacs (P.Y. Rs. 5425.53 Lacs), reflecting topline performance during the year. EBITDA increased by 18.60% of Rs. 1625.47 Lacs. Total exports reached Rs. 1541 Lacs this year, compared to Rs. 1025 Lacs for the previous year.


The Company continued with its initiatives to reduce procurement cost and to reduce operational costs. These initiatives helped the Company in the current year to keep the operational costs under control and improve the bottom line.


At Sanghvi forging, our commitment to customers is reflected in everything we do. We endeavor to be known as their business partners, effortlessly integrating our offerings into their operations. With the ability to manufacture products for multiple sectors, our customer profile has been growing with each passing year.

In over last two decades, we have established ourselves as a preferred forging manufacturer, not only in India but across the globe. Today, we have presence in more than 14 countries, supplying value added products to various global OEMs.

Approval & Certifications

approvals Certifications
Lloyds (LRIS) IBR ISO 9001-2008 TUV NORD
SGS ABS PED 97/23/EC TUV Rheinland

Risks and Concerns

The Company considers good Corporate Governance as pre-requisite for meeting the needs and aspiration of shareholders and other stakeholders in the Company. As part of the company's efforts to strengthen corporate Governance, the Board of Director has formulated Risk Management policy, which puts in place Risk Management structures with a clear definition of roles and responsibilities, as well as risk portfolio involving a continues process of Risk identification, risk assessment, control assessment and risk monitoring, review and communication. The Company aims to: Identify, assess and manage existing as well as new risks in a planned and coordinated manner. Increase the effectiveness of the company's internal and external reporting structure.

Develop and foster a "risk" culture within the organisation that encourages all staff to identify risk and associated opportunities and respond to them with appropriate actions.

Internal Control Systems and their Adequacy.

The Company has appropriate internal control systems and procedures in place with regard to effective utilisation of resources, efficiency in operation, financial reporting and compliance with various rules and regulations.

The implementation of the SAP ECC 6.00 system in 2008 for better control and reliability of the various business and processes was supplemented by extensive audits conducted by the Statutory Auditors.

key processes including production, planning and accounting are done routinely through the globally benchmarked SAP initiatives. Regular audits are conducted to review the adequacy and effectiveness of the internal controls and suggest improvement, if any, to strengthen the existing system.

discussion on financial Performance with respect to operational Performance.

Amid optimism and rising business sentiments, your Company reported a top-line growth of 61.04% in revenue over the Previous Year. Revenue from Operations stood at Rs. 8737.61 Lacs compared with Rs. 5425.53 Lacs in Previous Year. Profit after Tax stood Rs. (794.70) Lacs as against H(778.47) Lacs in the Previous Year.

These results were achieved in the face of prevailing recessionary conditions, finance cost, competitive environment, balanced by efforts towards cost control and depreciation costs as well. We believe that our businesses are backed by necessary skills and expertise and remain cautiously optimistic that performance and profitability will improve with continuing momentum of operational improvements and the expected upturn in the global and Indian economy and forging markets.

Export continues to drive the growth. It clocked Rs. 1541 Lacs from Rs. 1025 Lacs in the Previous Year. Order book size as on 31 March, 2015 is Rs. 3200 Lacs including domestic as well as exports orders.

development during the year

Your Company has also received few approvals from Leading Indian Defence & Strategic Sector Organisation in defence sector i.e. ISRO, DRDL, BARC, DMRL, IGCAR, VSCC, NPCIL, MDL etc. and also commissioned India's largest capacity : Polymer Quenching Tank during the year.


Operational Excellence:

SFEL is committed to achieving the highest levels of operating efficiencies and effectiveness across all business activities, both customer facing and internal. Efficient planning, superior processes supported by automation and meticulous execution driven by operating discipline forms the bedrock of all operations.

Sector wise overview

Development in Defence, oil and Gas, Shipbuilding industry driving forging demand, production is expected to hit 140 Million Ton by the end of 2016, while consumption is expected to grow 6.8% to reach 104 Million ton by 2017.

India's space program lunched 40 satellites for 19 countries, there is a scope in contribution to realization of operational task in the new areas.

Strengthening senior management team

Your Company consistently nurtures internal talent and is in the process of expanding the pool of capable people to drive growth.

Strengthening the Board of directors

In May 29, 2015, SFEL strenghthening its Board of

directors by appointing Mrs. Aruna Khasgiwala as additional Independent director. She is Retd. professor, former Dean (2003-2010), former head (2003-2008) faculty of Social Work in the M. S. university of Baroda. She holds degree of M.A. (Social Work) specialization, Medical & Psychiatric Social Work, delhi university, Ph.d. (Social Work) M.S. university of Baroda, she has over 41 years of experience in teaching and field.

Subsidiary Company

Your company has formed a wholly owned subsidiary namely Sanghvi Europe B.v. in Nethelands to develop its markets in Netherlands.

FINANCIAL PERFORMANCE 2014-2015 2013-2014
Net Sales 8737.61 5425.53
EBITDA 1625.47 617.88
Profit After Tax -794.70 -778.47
EPS - basic -5.85 -6.10
revenue Break-up %
2014-2015 2013-2014
domestic 82 81
International 18 19
revenue Break-up (Rs. in lacs)
2014-2015 2013-2014
domestic 7172.02 4356.17
International 1541.21 1025.71

Quality Standard

Your Company focuses on superior quality, shorter lead time and high service level to keep the customer

satisfaction high. Besides, its ability to be a one-stop shop for all customer needs, ability to support the customer across the globe and focus on efficiency and cost management help to sustain its position as a world-class forging provider.

Material Developments in Human Resources / industrial Relations Front, including Number of People employed.

the Company's innovative human resources management strategies supported business in a challenging economic environment. Strategic talent acquisition and performance management are key to ensure diverse and competency - driven workforce.

A working environment where performance is rewarded; employees are respected and opportunities are made available to release there potentials in creating a performance oriented culture. Several HR initiatives have been started to improve employee engagement and organisational performance.

To enhance employee engagement and to work towards employee satisfaction. In addition, stabilization and revision of various policies and process improved operational excellence.

The Company recruited talented professionals (employee strength 229 as on March 31, 2015) with an emphasis on training and development. Investments were made to upgrade the facilities available to employees. This has resulted in the maintenance of harmonious relations with its employees.

On the behalf of the Board of directors

Babulal S Sanghvi


Place: Vadodara

date : May 29, 2015