Autoriders International Ltd Management Discussions

Autoriders International Limited, a leading and well established organization providing Car Rental Services, having an all India presence with impeccable service standards. The company is focused on sustainable growth by improving service delivery, technology absorption, fleet management by upgradation and human resources management resulting in enhanced customer satisfaction.

The company achieved Gross Revenue of over Rupees 83 crores and profit Before Tax of Rupees 11 Crores. Also, the company is looking at various revenue enhancement and cost containment measures so as to improve its profit.

1. Industry Structure and Development

Travel & Tourism Industry in India plays a significant role in Indias economic growth, reflecting as a major contributor to GDP and foreign exchange reserves. Tourism in India has gained prominence as it has a multiplying effect of repaid economic expansion and job creation. It drives growth in Service sector of airlines, hotel and transportation businesses. Tourism in India represents a large market with growing population in major cities and development of other many small cities. Apart from domestic tourists, it is huge market for international tourists in the form of adventure, leisure, Culture, medical, wellness, eco, wildlife and religious tourism. Travel and Tourism is a major foreign exchange earner for India. Travel and tourism necessitates infrastructure development of roadways, water transport, Airports and Construction businesses resulting in inclusive growth, regional and rural development. It also helps small and auxiliary businesses directly and indirectly supporting travel and tourism. Tourism has put India on the global map promoting cultural diplomacy, friendship and cooperation with other countries.

Car rental market in India has registered a significant upswing in recent years as evidenced by robust growth in volume and profits. There is a shift from an unorganized to organized sector through the development of online booking, wide spectrum of fleet structure and offering flexible transport solutions to varied customers.

To fuel and be part of the growth, it is imperative to invest in most modern fleet, innovative reservations and payment system and software, mobile applications and vehicle tracking technology which enables seamless booking, remote vehicle tracking and monitoring , improved fleet management and security etc., all ultimately resulting in enhanced efficiency and convenience contributing to customer satisfaction and loyalty.

2. Opportunities

Car rental industry in India has seen upward growth in recent years driven by favorable economic environment for expansion. Rapid urbanization the country leading to infrastructure development aided growth of car rental business especially in the corporate sector. A significant push for growth of car rental industry comes from tourism both domestic and international, which is flourishing in India. Preference of the corporate business houses to utilize car rental services rather than maintaining their own fleet of vehicle which is more flexible and economical is a major fillip to car rental business. A growing middle class and changing social attitude can be a boost to car rental services ensuring road travel more efficient and convenient to the user in comparison to public transportation. The car rental industry can enhance growth with introduction of innovative business models involving new technology applications and its upgradation. Better growth is expected for car leasing and car sharing business in the coming years. By systematic fleet management introducing of new fleet considering the current and future market trends and operating system upgradation, company is hopeful of improving its business in terms of revenue and margins.

3. Segment-wise or product-wise performance

The Company has a single segment reporting during the year. The performance of the product is quite satisfactory during the financial year.

4. Outlook

The future outlook of travel and car rental industry look quite positive as reflected by sustainable growth in volume and margin. Asia-Pacific is the fastest-growing market, attributed to rapid urbanization, rising disposable incomes, and the expansion of international travel. India is witnessing significant growth in car rental services supported by growing middle class and increased business travel. It also depend on the other economic, social and political environment prevailing in the country as well as globally.

5. Threats, Risk and Concerns

Car rental business face several challenges, significant being high cost of maintenance of fleet, fluctuation in fuel prices , scarcity of chauffeur services, regulatory hurdles etc. despite the positive outlook. Occurrence of any pandemic type of situations in future will adversely affect the industry in general and Covid-19 had showcased the vulnerability of travel industry effecting the car rental market.

The increase in competition and the input costs could put pressure on the margin. However the company is hopeful of maintaining its margin by taking appropriate measures of monitoring and analyzing various aspects in operations and management, receivable management, human resources and other functional areas to that effect.

Also, the deteriorating relationship between countries and terrorist activities would negatively impact the industry globally. However, constructive dialogue between various nations to defuse tension and steps taken by the governments all over the world to counter terrorism would improve the situation.

3. Internal Control Systems

The Company has an internal control system in place which is commensurate with the size and nature of its business. The internal control system ensures that all the assets of the Company are safeguarded from loss, damage or disposition. Checks and controls are in place to ensure that transactions are adequately authorized and recorded and that they are reported correctly. The internal control system is supplemented by an extensive programme of internal audit by a firm of independent Chartered Accountants and external statutory audit which is periodically reviewed by the management and Audit Committee.

4. Financial Performance with respect to Operational Performance Sales and Profit:

During the year Gross Sales has increased by 18.21% and an increase of 40.0% was seen in the Net profit.

Capital Investment:

Capital Investment of Rs. 18.93 Crores were made during the year. The entire capital investment has been made out of financial assistance from Toyota Financial Services India Limited, Sundaram Finance Ltd, Axis Bank, Karur Vysya Bank Ltd, Yes Bank Limited and Mercedes Benz Financial Services Ltd.

5. Human Resources and Industrial Relations

The Companys HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity: to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel. Industrial relations were cordial and harmonious throughout the year.

6. Details of significant changes (i.e. Change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor

7. Details of any change in return on net worth as compared to the immediately previous financial year along with a detailed explanation thereof:

8. Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectation are “forward looking statement” within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.