Asahi India Glass Ltd Management Discussions

Asahi India Glass Ltd. (AIS) is a leading company in India with immaculate specialisation in comprehensive glass solutions. Commencing its operations in 1987, AIS has emerged as a dominant leader in the automotive and architectural glass sectors over the years. The Company offers a varied and wide range of services, including glass manufacturing, processing, fabrication, and installation, covering the entire value chain for both segments. AIS has consistently played a significant role in various glass segments such as automotive, architectural, and consumer glass. Its growth trajectory has been propelled by factors like increased infrastructure development, urbanisation, and the demand for sustainable, energy-efficient materials. The Indian glass industry is poised for significant growth, largely driven by the construction, automotive and solar sectors. Government initiatives focused on infrastructure and smart city projects are expected to further escalate the demand for architectural glass products. Additionally, the rise of middle-class population and increased consumer spending are anticipated to bring a significant boost to the glass consumer goods market.

AIS distinguishes itself through its comprehensive integration across the glass value chain, allowing it to provide end-to-end solutions for its customers. Its exceptional design and development capabilities facilitate continuous innovation in its wide range of glass products. Current industry trends indicate a move towards advanced glass products, such as solar control low-emissivity (low-E) glass for energy-e_cient buildings and advanced automotive value added glasses. These trends are driven by environmental concerns and the need for improved thermal insulation and safety features. AIS is committed to drive stable and sustainable progress. To maintain its competitive edge, the company focuses on product innovation and invests in research and development to introduce advanced glass products with enhanced features. AIS is also committed to adopt sustainable practices, including reduction of energy consumption, recycling glass waste, and implementation of eco-friendly manufacturing processes to overcome environment related challenges.

Macro-Economic Review

Global

Amidst various challenges and evolving macroeconomic scenarios globally, the world economy has showcased remarkable resilience throughout the calendar year (CY), characterised by consistent growth and a notable decline in inflation. Despite hurdles such as post-pandemic supply chain disruptions and the Russia-Ukraine conflict-induced energy and food crises, the global economy has navigated through these adversities. Additionally, a surge in inflation, followed by synchronised monetary policy tightening, has shaped the economic landscape.

Global growth, which peaked at 3.2% in CY 2023, is expected to maintain stability through CY 2024 and CY 2025, albeit below the historical average of 3.8%. This trend is influenced by factors like restrained monetary policies, reduced fiscal aid, and sluggish productivity growth. Despite these challenges, a decline in global headline inflation is projected, from an annual average of 6.8% in CY 2023 to 5.9% in CY 2024, further dropping to 4.5% in CY 2025.

The recovery trajectory varies across regions, with advanced economies anticipating a slight uptick, primarily led by the euro area?s revival. In contrast, emerging markets and developing economies are forecasted to maintain steady growth, albeit with regional disparities. While Asia may experience a moderate growth slowdown, regions like the Middle East, Central Asia, and sub-Saharan Africa are poised to counterbalance this moderation. The global macroeconomic landscape for CY 2024 is expected to be characterised by a mix of opportunities and challenges. The world economy is projected to continue its growth trajectory, albeit at a slower pace compared to previous years. Key factors driving this growth include steady consumer demand, technological advancements, and a recovery in global trade. On the _ip side, there are several vulnerabilities in the global economy that could pose risks to the growth outlook. These include geopolitical tensions, rising protectionism and climate change. Infiationary pressures are also expected to rise in some regions, particularly as central banks start to unwind their ultra-loose monetary policies.

In terms of regional trends, emerging markets are likely to experience robust growth, supported by increasing investment inflows and a burgeoning middle class. In contrast, advanced economies may face challenges related to ageing populations, high debt levels, and sluggish productivity growth. Overall, the global macroeconomic environment in FY 2024-25 will require policymakers to strike a delicate balance between supporting growth and managing risks. Collaboration between countries will be crucial in addressing common challenges and fostering sustainable development across the world.

*United States, Euro Area (Germany, France, Italy and Spain) Japan, United Kingdom, Canada and Other Advanced Economies.

#Emerging and Developing Asia (China and India), Emerging and Developing Europe (Russia), Latin America and the Caribbean (Brazil and Mexico), Middle East and Central Asia (Saudi Arabia) and Sub-Saharan Africa (Nigeria and South Africa) Source: World Economic Outlook – April 2024

Outlook

The global economy outlook for CY 2024 is expected to be positive with steady growth projected in most regions. Developed economies are expected to see consistent grow th, driven by increased consumer spending, strong business investments and robust employment levels. Emerging markets are also projected to experience growth, supported by improving commodity prices, stable financial conditions, and increased trade volumes. However, there are potential risks to the global economy outlook, including geopolitical tensions, trade disputes, and environmental challenges. Rising inflation, supply chain disruptions, and increased debt levels in some countries could also impact economic stability. Overall, the global economy outlook for CY 2024 is cautiously optimistic, with the potential for continued growth and opportunity for businesses and individuals to thrive in a recovering global economy.

India

In India, the prevailing economic sentiment is marked by a cautious yet optimistic outlook with strong potential for growth and development. This positive trajectory is bolstered by robust policy interventions and a steady resurgence of public and private sectors. The Indian economy maintaining its upward trajectory despite global economic uncertainties, grew by 8.2% in FY 2023-24, marking the third consecutive year of over 7% growth, outpacing the global average. Key drivers of Indias GDP growth include increased public sector investment in infrastructure, a resilient financial sector, rising consumer demand, vibrant manufacturing and industrial activity, strong agricultural performance, favorable government policies, global trade opportunities, and technological innovations fostering productivity. Initiatives such as Skill India Mission, Start-Up India, and Stand-Up India have further spurred human capital development, including greater female participation, contributing to the nations economic resilience and growth.

The performance of key sectors such as agriculture, manufacturing, and services will also play a vital role in determining the overall economic outlook for India in the coming years. Efforts to modernise agricultural practices, enhance manufacturing competitiveness, and promote digitalisation in the services sector will be essential in driving sustainable growth and generating employment opportunities.

In FY 2024-25, Indias macroeconomic situation is expected to be influenced by a combination of domestic and global factors. As one of the worlds largest and fastest-growing economies, India will continue to focus on sustaining high levels of economic growth while managing inflation, fiscal deficits, and external imbalances. One of the key challenges to be faced by India in FY 2024-25 will be addressing income inequality and poverty levels, as well as ensuring sustainable and inclusive growth. The government will need to implement policies that stimulate investment, boost productivity, and create jobs in order to improve living standards for all segments of the population.

On the global front, Indias economic performance will be affected by fluctuations in global commodity prices, changes in international trade policies, and shifts in global financial markets. Given its high degree of integration with the global economy, India will need to closely monitor and respond to external developments that may impact its growth prospects. In terms of monetary policy, the Reserve Bank of India will need to strike a balance between supporting economic growth and containing inflation. Interest rate decisions will be guided by the need to manage inflation expectations while also providing sufficient liquidity to support investment and consumption.

O verall, Indias macroeconomic prospects in FY 2024-25 will depend on the governments ability to implement structural reforms, enhance infrastructure development, and create an enabling environment for businesses to thrive. With the right policies and interventions, India can continue on its path to becoming a global economic powerhouse.

The government?s economic policy agenda has been cantered on revitalising India?s growth potential. This involves reinvigorating the financial sector, streamlining business conditions to spur economic activity, and significantly enhancing both physical and digital infrastructure to bolster connectivity and thereby boost the competitiveness of manufacturing sector. Guided by this vision, the government has implemented a range of economic reforms aimed at fostering a business-friendly environment, enhancing ease of living, and fortifying governance systems and processes. India is currently the 5th largest economy globally and is expected to become the 3rd largest economy by CY 2030. Several developments have bolstered foreign investor confidence in the country. Progressive government reforms and growing investor faith in India?s growth story have propelled the Nifty 50 index to a new high during FY 2023-24. As of April 2024, India?s market capitalisation (mcap) hit the US$ 5 trillion milestone. This achievement makes India the 5th country/ region to join the exclusive US$ 5-trillion mcap club, alongside the US, China, Japan, and Hong Kong.

In FY 2023-24, the Wholesale Price Index (WPI) inflation stood at (0.70)%, significantly lower than the 6.52% WPI inflation reported in FY 2022-23. This sharp decline in inflation was a key factor contributing to higher profitability for Indian corporates, as input costs were substantially lower in FY 2023-24. India?s Consumer Price Index (CPI) inflation also eased to 4.75% in May 2024, down from 4.83% in April 2024. The Government aims to moderate CPI inflation and align it with a specified target on a durable basis, ensuring the best interest rate for the economy.

India?s current account recorded a surplus of US$ 5.7 billion or 0.6% of GDP in Q4 of FY 2023-24 after 10 consecutive quarters of deficit. This was driven by a sharp fall in the merchandise trade deficit to a 10-quarter low, partly offset by a decline in net services receipts. The reduction in the trade deficit was supported by a surge in non-petroleum exports (electronics, textiles, and engineering goods), improved petroleum exports, and a decline in non-oil imports. The capital account surplus widened to US$ 24.5 billion in Q4 of FY 2023-24 (vs. US$ 15 billion in Q3) due to higher loans and external commercial borrowings, despite lower net foreign investments.

For the FY 2023-24, India?s current account deficit (CAD) narrowed to a three-year low of US$ 23.3 billion or 0.7% of GDP, about one-third of the deficit in FY 2022-23 (US$ 67.1 billion or 2% of GDP). This improvement was aided by a lower merchandise trade deficit and higher services exports. Record-high net foreign portfolio investment and banking capital inflows offset a sharp drop in foreign direct investment, expanding the capital account surplus to a six-year high of US$ 86.3 billion in FY 2023-24, adding significantly to India?s foreign exchange reserves (+US$ 63.7 billion in FY 2023-24).

India?s external sector showed strong momentum and resilience in FY 2023-24 amidst a challenging global environment. Going forward, an expected improvement in the global landscape and trade is likely to bolster India?s exports. Strong macroeconomic fundamentals, along with the inclusion of Indian debt in global bond indices, should continue to support foreign portfolio inflows. Policy stability and a revival in consumption and private investments are expected to boost FDI inflows. Despite risks from geopolitical concerns, global monetary policy divergence, and rising commodity prices, India?s external situation is expected to remain stable in FY 2024-25. With adequate foreign exchange reserves, US$ 652.9 billion as of 14th June, 2024, stability for the INR is anticipated.

Outlook

The outlook for the Indian economy during FY 2024-25 appears very promising, with projections of steady growth and stability. Several factors contribute to this positive outlook, including economic reforms aimed at boosting growth and attracting investments. Initiatives such as Make in India, Digital India, and Startup India are expected to drive economic growth in the coming years. The government?s focus on infrastructure development and investment in sectors such as roads, railways, ports, and airports are expected to improve connectivity and boost economic growth.

India?s young population is seen as a demographic dividend, providing a large workforce and consumer base for businesses to tap into. This demographic advantage is likely to drive economic growth in the long term. The increasing adoption of technology and innovation in various sectors is expected to boost productivity and competitiveness, leading to sustainable economic growth. India?s participation in global trade agreements and partnerships is expected to open up new markets and opportunities for businesses, leading to increased exports and foreign investments.

However, challenges such as inflation, fiscal deficit, and geopolitical tensions could impact the economy during FY 2024-25. It is essential for the Indian government to continue implementing structural reforms and policies that support economic growth and stability to ensure a positive outlook for the economy in the coming years.

India?s economic aspirations are not only ambitious but also poised for remarkable growth, with the goal of reaching a US$ 7 trillion economy by CY 2030. The nation is currently on track to achieve the significant milestone of a US$ 5 trillion economy within the next three years, positioning itself as the 3rd largest economy globally. Moreover, India has set a bold target to transition into a developed nation by CY 2047, marking a monumental shift in its economic landscape.

Industry and Business Overview

Automotive Glass

Industry Structure and Development

The automobile industry in India is one of the largest and fastest-growing sectors in the country, significantly contributing to the Indian economy and providing employment to millions of people both directly and indirectly. It has seen significant growth and development in recent years. This industry encompasses various segments, including passenger vehicles, commercial vehicles, two-wheelers, three-wheelers, and tractors. It plays a vital role in driving economic growth, technological innovation, and infrastructure development. The industry?s expansion is driven by rising consumer demand, increasing urbanisation, and favourable government policies. As a result, the Indian automobile industry continues to be a key player on the global stage, attracting investments and fostering advancements in automotive technology. According to the Society of Indian Automobile Manufacturers (SIAM), the industry produced 28,434,742 units in FY 2023-24, marking a 9.6% increase from FY 2022-23. The production of the four-wheeler segment, including passenger and commercial vehicles, grew by 6% to 5,968,273 units in FY 2023-24.

India?s rapidly growing auto market is poised to hit a milestone, with projections indicating it will reach US$ 300 billion by CY 2026. This growth is fuelled by various factors, including rising income levels, urbanisation, and a burgeoning middle class with increasing purchasing power. The sector is poised for future growth, driven by trends such as vehicle electrification, especially in three-wheelers and small passenger cars. A key trend that will shape its future is the transition to electric vehicles (EVs). With the government targeting 30% EV penetration by CY 2030, the demand is expected to surge.

Despite its growth potential, the Indian automobile industry faces challenges such as infrastructure limitations, high taxes and tariffs, and a need for skilled labour. Additional challenges include evolving consumer preferences, heightened competition, and regulatory changes. Nevertheless, the industry is expected to continue growing and play a vital role in India?s economic advancement. The overall outlook for the Indian automobile industry remains optimistic, with its continued expansion anticipated to contribute significantly to the country?s economic development. As it navigates these challenges, the industry is poised to innovate and adapt, ensuring its sustained impact on the economy.

Automotive glass plays a crucial role in protecting vehicles from UV rays, wind, dust, and rain. It is primarily used in the production of windshields and windows and is designed to withstand high temperatures, ensuring passenger safety. As the automotive sector advances technologically with trends like connected cars, IoT, and AI-driven diagnostics, and vehicle designs evolve, manufacturers are increasingly introducing innovative products to meet the demands of the market.

The automotive glass market is seeing significant advancements, particularly in smart glass and gorilla glass technologies, aimed at enhancing comfort and efficiency. Smart glass, such as thermochromic glass, automatically adjusts the amount of light entering the vehicle, reducing heat build-up inside the cabin. This innovation not only improves passenger comfort but also reduces the load on air-conditioning systems, leading to lower carbon emissions and improved fuel efficiency. Electrochromic glass allows passengers to adjust the transparency of the glass, providing customisable comfort and privacy. Suspended particle device (SPD) glass uses electricity to switch between dark and light shades, making it ideal for sunroofs and other applications.

The industry?s focus on fuel efficiency and emissions reduction has led to increased production of lightweight and electric vehicles. This trend is expected to boost the demand for high-quality and value-added glass in the automotive industry in the coming years. As the market continues to grow, these innovations in automotive glass will play a key role in driving the sector forward.

Overall, the Indian automotive glass industry has shown strong growth potential and is poised for further development in the coming years. India accounts for 40% of total US$ 31 billion of global engineering and R&D spend. Around 8% of the country?s R&D expenditure is in the automotive sector.

With increasing investments in research and development, localisation as well as collaborations with global players, the industry is set to play a significant role in shaping the future of the Indian automotive sector.

Performance

AIS?s market presence has been significantly strengthened in car and glass segments in India, capturing an impressive ~75% market share in passenger car segment driven by the growing automotive sector. AIS has maintained its eminent position as the preferred choice for automobile manufacturers across various segments, including passenger vehicles, commercial vehicles, trucks, buses, railways, metros, tractors, off-highway vehicles, three wheelers and white goods segment. Revenue generation from the Strategic Business Unit (SBU) has witnessed growth of 21.26%, reaching _2,645.27 crores in FY 2023-24, compared to _2,181.41 crores in FY 2022-23. The operating profit for the same period stood at _315.34 crores, marking an increase of 94.80% from _161.88 crores in FY 2022-23.

These results underscore the Company?s commitment to innovation and quality, reinforcing its leadership in the automotive glass segment.

Product range

Windscreen

• Acoustic Windscreen

• IR Cut Windscreen

• IR Cut and Acoustic Windscreen

• Antenna Printed Windscreen

• Heated Windscreen

• Head Up Display

• Windscreen with Rain Sensor

• Windscreen with ADAS

• Thinner Windscreen

(2+1.8mm, 2+1.6mm)

Sidelites

• Dark Green UV Cut Glass

• Solar Control Glass

• UV Cut Glass

• Privacy Glass

• Water Repellent Glass

• Encapsulated Glass

• Plug in Window

• Sliding Window for Buses and Trucks

• IGU for Metro and Railways

• Thinner Sidelites (2.8mm)

• Laminated Sidelites

Backlite

• Backlite With Defogger

• Antenna Printed Backlite

• Privacy Glass

• Solar Control Glass

Sunroof

• Fixed Laminated

• Tilt and Slide

• Panoramic

• Bullet Resistant Glass

• Metro (Windscreen, Sidewindows,

Driver Cab Assembly Window)

White Goods

• Washing Machine - Flat / Bend

• Refrigerator Shelf Glass

• Refrigerator Door Glass

Operational achievements

New launches

• Maruti Fronx

• Maruti Jimny

• Hyundai Exter

• Honda Elevate

• Mahindra New Bolero MaXX

• MG Comet

Key awards from customers received during FY 2023-24:

• Maruti Suzuki India Ltd. - Overall Excellence Award - HR Award

• Daimler India Commercial Vehicle

- Plaque

- Nominee under category of Quality for the year 2022

- Certificate of Appreciation

For being a reliable partner and achieving 100% in delivery during the year 2022

• Hyundai

- Excellence in Sustainability Drive

• Mahindra and Mahindra Ltd. - Mahindra Supplier Excellence - Awards - Special Appreciation - Award - Scorpio

• Renault Nissan India Pvt Ltd. - Quality & Customer Satisfaction Mindset Award 2023

Road ahead

TheoutlookforIndia?sautomobileindustry is promising and highly optimistic, driven by several favorable macroeconomic factors. These include an expanding economy, ongoing investments in infrastructure, and robust demand for vehicle replacements. Additionally, the industry benefits from a vast domestic market, a growing pool of skilled engineers, continuous improvements in educational infrastructure, the adoption of international standards, and a strong emphasis on innovation. With increasing urbanisation, rising disposable incomes, and a growing population, the demand for automobiles is expected to surge.

Furthermore, the government?s focus on promoting electric vehicles and sustainable transportation solutions is likely to boost the sector.

India?s automotive industry is at a critical juncture, positioned to spearhead in the global shift towards sustainable mobility and technological advancement. With a strong ecosystem, we are experiencing an unprecedented convergence of innovation and growth. From electric vehicles to advanced features like autonomous driving, AI, and connectivity, the industry is leading the way in developing solutions that tackle environmental challenges while meeting consumer demands. This dynamic environment places India as a pivotal player in the global automotive landscape.

However, the industry will also face challenges such as evolving consumer preferences, changing regulatory norms, new emission standards (CAF? 3 norms), and global economic uncertainties. Automakers will need to adapt to these changes by investing in research and development, adopting sustainable practices, and enhancing the customer experience.

Architectural Glass

Industry Structure and Development

The Indian real estate sector has been a vital contributor to the country?s economic growth over the years. It encompasses a wide range of activities, including residential and commercial properties, retail and industrial spaces, and infrastructure development. Its substantial contribution to India?s GDP has established it as one of the key drivers of the nation?s economic progress.

According to a recent report by the Confederation of Real Estate Developers? Association (CREDAI), the real estate sector is expected to reach a market size of US$ 1.3 trillion (13.8% of projected GDP) by FY 2033-34 and US$ 5.17 trillion (17.5% of projected GDP) by 2047. The report also anticipates an additional demand for 70 million housing units by CY 2030, reflecting the sector?s pivotal role in addressing the country?s growing housing needs.

As of CY 2023, the real estate market stands at Rs 24 trillion, with an 80-20 split favouring residential and commercial properties, respectively. This ratio underscores the significant demand for residential properties, driven by the aspirations of Indian homebuyers. The residential segment, in particular, continues to show robust growth, fuelled by rising incomes, favourable government policies, and increasing urbanisation.

India?s urbanisation rate has been increasing substantially and is expected to rise to 40% by CY 2030. This rapid urbanisation will likely to lead a surge in demand for residential, commercial and improved infrastructure facilities. The real estate sector?s ability to adapt and meet these demands will be crucial for sustaining its growth trajectory and contributing to the broader economic development of the country.

The Indian office real estate market has driven the growth of the commercial real estate sector in the past decades. Once dominated by information technology, office spaces are now being increasingly leased by other sectors such as BFSI (Banking, Financial services and Insurance), engineering, manufacturing, e-commerce, and co-working sectors. The sector has demonstrated consistently low vacancy and high absorption rates. Commercial real estate investments have increased as a result of the Real Estate (Regulation & Development) Act (RERA) and Real Estate Investment Trusts (REITs). REITs own, manage, and fund income-producing real estate. Office properties have emerged as the most popular sector for investment among high-net worth individuals (HNI) in India and international PE investors, who together represent the majority of all equity investments in Indian real estate. Investors of all stripes are drawn to this industry by the high rental rates and better profits. Smaller homes and larger families have also contributed to the increase in flex and co-working spaces across the country. Architectural glass is an essential element in infrastructure and building construction due to its unique properties like high transparency, strength, and durability. It allows natural daylight to enhance aesthetic appeal and energy efficiency while withstanding various weather conditions and maintaining structural integrity over time. Unlike other materials, glass retains its color and appeal, making it ideal for both new construction and redevelopment projects.

The expanding Indian real estate market is driving significant growth in the architectural glass sector. The demand for high-quality building materials is rising due to urbanisation and economic development. Innovations in glass technology, such as low-emissivity coatings and double-glazing, further boost its popularity by enhancing energy performance and sustainability.

The government has planned 11 industrial corridors to boost industrial development across the country. Additionally, 54 global innovative construction technologies have been identified under a Technology Sub-Mission of PMAY-U, marking the beginning of a new era in the Indian construc tion technology sec tor. Furthermore, the outlay for PMAY is being enhanced to ensure more comprehensive housing solutions for the population. The focus on smart cities and green buildings in India underscores the importance of architectural glass in designing energy-e_cient structures. Its recyclable nature and superior energy efficiency align with the construction industry?s sustainability goals, making glass a preferred choice. As India continues to urbanise and prioritise sustainable development, the architectural glass market is poised for significant growth.

Performance

The Architectural Glass division delivered a strong performance during the reviewed year, showcasing robust results. There was a notable increase in the share of value-added products within the overall segment sales, reflecting healthy growth. Furthermore, the division achieved a domestic market share of 16%.

The Strategic Business Unit (SBU) reported a revenue of 1,492.26 crores in FY 2023-24 compared to 1,675.84 crores in FY 2022-23. The operating profit for FY 2023-24 stood at 264.17 crores as compared to 503.29 crores recorded in FY 2022-23.

Product range

Float Glass

• AIS Clear - Clear Float Glass

• AIS Tinted - Heat Absorbing Glass

• AIS Opal - Value for money Solar

Control Glass

• AIS Opal Trendz – Patterned Re_ective

Glass

• AIS Sunshield

• AIS Sunshield Trendz – Patterned

Sunshield Range

• Ecosense - High Performance Energy

E_cient Glass

Value-added Glass

• AIS Stronglas - Impact Resistance Glass

• AIS Securityglas - Burglar Resistant

Glass

• AIS Acousticglas - Noise Cancelling

Glass

• AIS Valuglas

• AIS Securityplus

• AIS Insulated - Glazed Unit

• AIS Heat - Strengthened Glass

Super Speciality Glass

• AIS Swytchglas - Electrochromatic

Glass

• AIS Integrated Blinds

• AIS Pyrobel - Fire Resistant Glass

Energy - Efficient Re_ective Glass

AIS Windows

• uPVC

• Aluminium

Designer Glass

• AIS Mirror - Distortion-Free Mirrors

• AIS D?cor - Back Painted Glass in

Vibrant Colors for Interiors

• AIS Krystal - Only Branded Frosted Glass

• AIS Disegno

• AIS Mesh Laminated

• AIS Colored Laminated

• AIS Fabric Laminated Glass

• AIS Ceramic Frit

• AIS Printed Glass

• AIS Acid Etched Glass

Operational achievements

• AIS acquired (through its subsidiary) certain assets of Balaji Building Technologies, Bengaluru (BBT), in BBT?s business of architectural glass processing.

• The Company implemented comprehensive market development and relationship-building programmes for stronger dealer engagement.

• The Company organised the AIS Design Olympiad FY 2023-24 with the theme Futuristic Building Design - Building Beyond Boundaries.

• AIS undertook several social media campaigns and influencer collaborations for its products and categories.

• AIS participated in various events and exhibitions, including the IGBC Green Building Congress 2023, Fire Safe Build India 2024, iDAC, and the TERI GRIHA Summit 2023, among others.

• The Company started AIS Academy: A series of physical sessions and lectures conducted by AIS subject matter experts for architectural students with partner colleges and universities.

Road ahead

The demand for glass is driven by legislation and regulations focused on safety, noise control, and energy conservation. Design trends favouring glazed buildings that maximise natural light are also propelling the growth of the glass industry. Technological advancements in manufacturing have led to the production of superior-quality architectural glass, offering improved thermal insulation and enhanced aesthetic appeal.

It is encouraging that low-quality float glass is increasingly being replaced by high-quality products. This shift is mainly due to the efforts of organised and large players in the market who educate consumers, demonstrate the advantages of better-quality glass, and facilitate the adoption of high-quality materials at only slightly higher costs. The outlook for the glass industry in India is indeed promising and positive. Ongoing government investments in infrastructure development and sustainable construction practices are projected to boost demand for glass products. The industry?s focus on innovation and the advancement of glass solutions will further contribute to growth. However, it will be crucial for the industry to address challenges related to raw material availability and energy costs to ensure long-term sustainability and competitiveness. Furthermore, the increasing focus on green and eco-friendly products is driving the demand for energy - efficient glass solutions in the market. As sustainability becomes a key priority for consumers and businesses, the Indian glass industry is poised to capitalise on this trend by offering innovative and environment-friendly products.

Overall, the Indian glass industry is well-positioned to thrive in the years to come, driven by factors such as infrastructure development, increasing consumer awareness, and technological advancements. With the right strategies and investments in place, the industry can continue to grow and expand its market presence both domestically and globally.

Consumer Glass

AIS operates a state-of-the-art experience centers in Delhi and Bengaluru, making history as the first glass company in India to offer a fully immersive, 360-degree, multisensory, and interactive space. This state-of-the-art facility provides customers with a unique opportunity to thoroughly explore and understand AIS products and solutions before making a purchase.

AIS Windows provides a diverse range of glass and window solutions known for their exceptional features, including noise cancellation, burglar resistance, energy savings, and anti-pollution properties. Each product is meticulously crafted with precision and professionally installed to ensure customers derive maximum benefits from their investment.

AIS Glasxperts provides a comprehensive range of glass, window, and door solutions, addressing key priorities such as safety, security, energy efficiency, and acoustic comfort. Catering to diverse customer needs, including sliding windows, bay windows, and sliding doors, AIS Glasxperts delivers top-quality, customised solutions through their full-service approach, ensuring optimal satisfaction for every customer.

AIS Windshield Experts is the largest automotive glass repair and replacement service company in India. With a well-established network of service centers and mobile service vans, the company ensures convenient and efficient service delivery. Holding ISO 9001:2015 certification, AIS Windshield Experts is committed to quality and is the only company in India offering a one-year warranty on both workmanship and materials used, providing customers with added assurance and peace of mind.

Opportunities and Threats

Opportunities

• The Indian market offers significant growth potential in both automotive and architectural glass.

• Automobile exports from India are rising, and there is an increasing trend in the use of value-added glazing products in vehicles.

• Increased demand for residential and commercial buildings drives the need for high - quality float glass.

• Government reforms, including stricter quality standards for all glass products and the curbing of spurious imports, are propelling the industry forward.

• The rising adoption of energy-e_cient building practices boosts the demand for float glass with insulating properties.

• A growing preference for modern interiors with glass elements is spurring demand for decorative float glass.

• There is a greater scope for innovation and adding value to glass.

• New segments are emerging in the glass industry, fostering its development.

Threats

• Geo - political uncertainties and supply chain disruptions

• Massive volatility in commodity prices and risk of foreign exchange

• Removal of Anti-dumping duty etc.

• Competition & use of alternatives

Total Quality Management (TQM)

With the Company?s ongoing commitment to excellence, it has further strengthened its established TQM practices and integrated improvement tools from the Toyota Production System (TPS), Total Productive Maintenance (TPM), and Six Sigma into its Auto and Architectural Business Units for the year ending March 2024.

In pursuit of excellence, AIS was honored with a "Certificate of Appreciation" at the corporate level for Excellence in New Product Design & Development and Localisation at the 9th ACMA Technology Summit and Awards 2023 in New Delhi. The Company?s improvement themes (Deep Analysis, Kobetsu Kaizen, PDCA) have yielded significant results. Over the past year, it completed more than 150 PDCA themes, bringing the total to about 1,550 themes since the Deming examination. This progress reflects the significant contributions from all SBUs, continually advancing its improvement efforts. Guided by the Deputy Managing Director (DMD), AIS initiated a revised methodology for operator efficiency improvement in the Auto division. This initiative led to over a 10% productivity increase in the sub-assembly area, with plans to expand this scope further in the future.

Employee involvement has been the key focus, with over 80% participation in all plants through Quality Control (QC) circles, Jishu Hozen Circles, and Cross-Functional Teams (CFT). AIS has increased employee engagement by promoting participation in QC circles, kaizen, and suggestion schemes. Internal QCC circle competitions were held across all plants, and the Company enhanced participation in external QC competitions to motivate its employees. Notably, 18 QCC teams from different locations participated in the National Level QCC convention.

To enhance workforce competence in problem-solving, AIS has conducted various training programmes both internally and externally across all locations. Key training initiatives included:

- Lean Manufacturing / Maruti Production System (MPS)

- Comprehensive training for all employees through MACE was a primary focus area in the previous year.

These efforts reflect the Company?s dedication to continuous improvement and excellence in all aspects of its operations.

Information and Digital Technology (IDT)

AIS IDT is a corporate function that collaborates closely with various businesses, corporate departments, and partners to strategically steer the Group?s IDT initiatives. IDT is responsible for developing and overseeing policies related to standards, information risk management, and governance. Operational responsibilities are outsourced to partner teams, under the guidance of the CIO. IDT manages the Help Desk, supporting Group-wide managed infrastructure services and business applications such as Oracle EBS and legacy systems, all within the ITIL framework. Additionally, IDT plays a key role in business transformation projects, implementing enterprise architecture, best practices, and digital technologies like Mobility, Analytics, and IIoT to enhance the Digital Business Ecosystem.

Major IT initiatives

• Migrated major critical applications to the cloud, including Oracle ERP, Point Solutions and O365.

• Implemented a Digital Workplace utilising the Microsoft platform and Copilot in specific areas.

• Achieved go-live for IT services at GS Bangalore and Pune warehouses.

• Deployed O365 at a subsidiary company to enhance communication and control.

• Implemented SAP B1 at subsidiaries.

Major Digital initiatives

• Implemented Kapture CRM at WE to enhance customer experience.

• Deployed a Manufacturing Execution System (MES) in Chennai for real-time traceability and shop floor digitisation.

• Finalised the IIoT framework, integrating MES and ERP for seamless machine connectivity.

• Completed a proof of concept (POC) for LLM/Copilot, paving the way for a pilot project.

• Received the SKOCH Award in March 2024 for the successful implementation of a digital HRMS.

Human Resources

The Company takes pride in its best-in-class policies and practices that create a participatory, collaborative, cohesive, and employee-centric workplace culture with a strong sense of ownership. It maintains a diversified workforce without any discrimination based on nationality, sex, religion, marital status, caste, or creed. It?s inclusive HR policies are designed to motivate employees and foster a harmonious work environment. These policies include merit-based recruitment, adequate training facilities, rewards, and recognition. AIS emphasises skill enhancement, knowledge upgrading, and employee motivation, all of which contribute to organisational excellence. As of 31st March, 2024, the total manpower strength stood at 7,195.

Risks

AIS recognises the impact of industry uncertainties and their potential outcomes. At the heart of the business model is a comprehensive and integrated risk management framework. This framework includes a clear understanding of strategy, policy initiatives, prudential norms, proactive mitigation measures, and structured reporting. By addressing risks through this thorough approach, it ensures resilience and adaptability, allowing the Company to navigate challenges effectively and maintain its commitment to excellence and sustainable growth.

Internal Controls

The Company has comprehensive and sound internal control practices in place across all processes, units, and functions. It has well-laid policies and processes for the management of its day-to-day activities. These controls are well-designed and commensurate with the size and scale of operations. The company regularly evaluates the adequacy and effectiveness of all internal Controls, risk management, governance systems, and processes, and is staffed by appropriately qualified personnel.

Outlook

In conclusion, the Indian glass industry has experienced consistent growth in recent years, driven by the urbanisation, construction, automotive, and consumer sectors. However, the industry also faces challenges such as competition from alternative materials, rising raw material costs, and the need for environmental sustainability. To maintain its competitive edge, AIS should prioritise continuous innovation, cost optimisation, and the adoption of sustainable practices. By addressing these challenges, AIS can position itself for sustained success in the evolving glass industry.