Auto Pins (India) Ltd Management Discussions

India has emerged as one of the fastest growing economies in recent times. The global growth prospects also look positive with the main economies gradually ascending the growth ladder.

It requires expertise, in terms of technology, design and providing customer satisfaction. It potential and market is huge; however only companies who would be able to provide good quality products at most competitive price will survive. The Companys brand has emerged as brand for reliability and has been able to win the customer loyalty in all these years. The Company will continue its successful stint in the industry, through providing good quality products at most reasonable prices and complete customer satisfaction by its strong distribution and service network.

INDUSTRY OVERVIEW

The India automotive leaf springs market size was valued at USD 437.9 million and is expected to expand at a compound annual growth rate (CAGR) of 11.8% [Source: 6Wresearch ]. Growing demand for vehicles, stringent emission norms, rising disposable income, and technological advancements are some of the major factors driving the growth of this market in India. Additionally, greater emphasis on safety features has further increased demand for leaf springs in automotive applications.

COMPANYS PERFORMANCE

The financial performance for the year ending March 31, 2025, for the companys Leaf Springs product line shows a decline compared to the previous year.

Heres a breakdown:

Revenue from Operation: Rs4642.78 lakhs (FY2025) versus Rs6433.76 lakhs (Previous Year).

Profit Before Tax (PBT): Rs45.27 lakhs (FY2025) versus Rs164.75 lakhs (Previous Year).

This indicates a significant reduction in both revenue and profitability within the Leaf Springs product category. The global leaf spring market was valued at $4.86 billion in 2024 and is expected to reach $7.01 billion by 2033, indicating overall industry growth.

The reasons for decline in companys performance could include:

Increased Competition: The leaf spring market is intensely competitive, with both global and regional players vying for market share.

Technological Advancements: The shift towards alternative suspension systems like air suspension in some segments and the adoption of advanced materials like composites for leaf springs, aiming for lighter weight and higher performance, might have impacted the demand for this companys traditional Leaf Springs products.

Fluctuating Raw Material Prices: Prices of materials like steel, crucial for leaf springs, can impact manufacturing costs and profitability.

Other Operational Issues: Internal factors specific to the company, such as production inefficiencies, marketing challenges, or customer relationship management, could also contribute to the decline.

Economic Factors: Broader economic conditions can affect a companys performance, even one that is generally stable.

Despite the decline, the directors are confident in the companys future performance and are focused on improving the situation. They may be planning to address the challenges through innovation, diversification, or strategic adjustments in their product offerings or operations.

OPPORTUNITIES AND THREATS.

The automotive leaf springs market in India has witnessed significant growth due to the countrys expanding automotive industry. Leaf springs are crucial components in the suspension systems of commercial vehicles, and the rise in demand for transportation and logistics services has contributed to the increased adoption of leaf springs. However, the market faces some challenges that affect its growth prospects. One of the key challenges is the growing preference for air suspension systems over traditional leaf spring setups in certain segments. Air suspension systems offer better ride comfort and adjustability, making them attractive for certain commercial vehicle applications. To remain competitive, leaf spring manufacturers must focus on improving product durability, weight reduction, and overall suspension performance. Furthermore, the market faces intense competition, both from domestic and international manufacturers, leading to pricing pressures and narrower profit margins. To thrive in such a competitive landscape, companies need to innovate and diversify their product offerings to cater to different vehicle types and customer preferences. Additionally, the fluctuating prices of raw materials, such as steel, impact the manufacturing costs and challenge the market players to maintain stable pricing for their leaf springs. Proper supply chain management and strategic sourcing become crucial to mitigate these challenges and sustain growth in the India automotive leaf springs market.

RISK AND CONCERNS

Future strategies of the auto companies will have to focus on increased environmental safety concerns, rising fuel prices and cost-effectiveness in the rising market competition. Innovation has to focus on increasing efficiency and reducing emissions.

Customer experience will be a key factor to retain the existing ones and reach out to the new ones. Aftersales service is an important aspect which will help in winning the loyalty of the consumer.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY.

The Company has established appropriate and adequate systems of internal controls, procedures and policies to ensure the accuracy, efficiency, timely preparation and completeness of accounting records and financial information and to prevent and detect fraud and errors. Given the dynamic of todays business environment and the evolving regulatory landscape, we are adapting to technology and digitization to strengthen our internal control systems and to ensure adherence to applicable laws, regulations, and internal policies.

DETAILS OF KEY FINANCIAL RATIOS

The Company has identified the key financial ratio as described in Financial Statement that is the part of Annual Report.

DETAILS OF ACCOUNTING TREATMENTS

Accounting treatment are mentioned in Financial Statement and Auditors report for the year ended 31.03.2025 that is the part of Annual Report.

WORKING CAPITAL MANAGEMENT

Your Company practices prudent working capital management, methodologies and adequate planning for managing its day-to-day requirements of working capital funds. The Company focuses on timely receivables, realizations, and low inventory level considering JIT supply to customers which helps in reducing the working capital requirement. The funds are borrowed from Banks to bridge the working capital gap on weekly basis to avoid fixed liability of interest.

HUMAN RESOURCE MANAGEMENT

The Company believes that its employees are the most valuable assets. It encourages passion, commitment, innovation and meritocracy, and this has enabled the company to sustain its leadership position. The Company is focused not only in attracting but also in retaining talented individuals across Companys business units. It does this by ensuring that the employees professional growth is consistent with their aspirations, and also within the framework of the corporate goals.

During the period under review, the Company maintained cordial relationship with all its employees. The Directors would like to acknowledge and appreciate the contribution of all employees towards the performance of the Company.

FUTURE OUTLOOK

The long-term outlook remains positive for the automotive industry with all major global players having a base in India for manufacturing, global sourcing as well as engineering. Correction in fuel prices and lower finance cost should further add domestic growth in the short to medium term. Regular product launches planned by OEMs will keep customer excitement levels up and create demand and is favourable for overall industry growth.

FORWARD LOOKING STATEMENTS

Investors are cautioned that statements in this management discussion and analysis describing your Companys objectives, projections, estimates and expectations may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied.

Important developments that could affect your Companys operations include a downtrend in the automobile industry global or domestic or both, significant changes in political and economic environment in India or key markets abroad, tax laws, litigation, labour relation and interest costs.

PERFORMANCE EVAULATION CRITERIA OF INDEPENDENT DIRECTORS

1) Attending Board/Committee Meetings.

2) Going through the agenda papers and providing inputs in the meetings of Board/ Committees.

3) Guidance to the Company from time to time on the various issues brought to their notice.

4) Discharge of duties as per Schedule IV of the Companies Act, 2013 and compliance to other requirements of the said Act or other regulatory requirements.

Moreover, the performance evaluation is also based on the terms as specified in the Nomination and Remuneration Policy.