galaxy bearings ltd share price Management discussions

ANNEXURE- 6

ECONOMIC OVERVIEW

The global bearing market size was valued at USD 111.59 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 10.6% from 2023 to 2030 by Grand View Research, Inc. The upcoming decades economic outlook foresees an extended duration of turbulence and uncertainty for businesses.

Bearings play a pivotal role in a myriad of applications that involve movement, serving as the silent heroes that minimize friction between various mechanical components within a plethora of industrial machinery and equipment. From the realm of automobiles to the inner workings of household appliances, from the boundless skies of aerospace engineering to the heart of industrial machinery, bearings find their applications intertwined with machinery and the motor-driven linkages that propel our world forward.

The growth rate of the Indian Bearings Market is 11.3%, with an estimated value of $3374.39 Million by 2027 (Source: Researchandmarkets.com) The increasing need for specialized bearing solutions and enhanced designs to boost product performance and efficiency is anticipated to drive demand over the next decade.

INDUSTRY STRUCTURE AND DEVELOPMENT AND OUTLOOK

The trajectory of the bearing industrys growth is closely intertwined with the fortunes of the automotive and industrial sectors. Notably, a substantial portion of Indias bearings market remains unorganized, serving the needs of the budget-conscious replacement market. Numerous key industrial sectors and user segments are poised to drive the production of industrial machinery and automobiles. This surge in production is expected to trigger a corresponding rise in demand for automotive components, machinery, and vehicles, particularly within developing nations.

Positioned advantageously, the Company stands ready to seize emerging opportunities. the Company possesses the tools to confront the future with unwavering determination. This positions it to furnish customers with an all-encompassing product array, underscoring both impeccable quality standards and service support. Through these efforts, the Company is dedicated to bestowing value and fostering sustainable growth.

The growth of the industry can be attributed to various factors such as rising disposable incomes, the availability of credit and financing options, and the increasing population in India. Also, the growth of the passenger transport sector and the increasing demand for commercial vehicles are expected to drive future growth in the automotive sector. Additionally, the demand for electric vehicles is expected to surge significantly in India, particularly in the two-wheeler segment. Experts predict that as many as 9.1 mn electric vehicles may be on the road in India by 2027.

RISK & CONCERN

The Company is exposed to external business risk, internal risk and financial risk. External business risks arise out of highly competitive industry, Variations in prices of raw-material etc. Internal risks basically cover operational efficiency and ability to withstand competition. Financial risks are basically in the nature of interest rate variations.

OPPORTUNITIES AND THREATS

Opportunities:

The thriving manufacturing sector, driven by demand from various industries, is fueling Indias bearing industry growth. This surge is significantly catalyzing the expansion of Indias bearing industry. An interesting

development is the increasing integration of new technologies and digitalization. Manufacturers are actively embracing these trends by gravitating towards customized bearings that cater to their dynamic requirements. This shift is so profound that the escalating demand for specialized bearing solutions tailored to distinct industry needs. Additionally, advancements in industries such as aerospace and defence, shipbuilding, energy, capital goods, and railways are poised to positively impact the ball bearing market in the future.

Automotive component manufacturers are embracing cutting-edge technologies to attain efficiency targets, lower emissions, and enhance fuel economy. Bearings assume a pivotal role in actualizing these aims. Furthermore, the surging interest in electric vehicles is propelling the need for high-performance bearings in transmission and wheel assemblies. Additionally, the governments steadfast policies and initiatives are providing a strong stimulus for the bearing industrys expansion.

Threats:

The production of bearings is intricately tied to the accessibility of raw materials at favourable costs. Market fluctuations can exert substantial influence on the bearing industry, directly affecting its profitability. Key among these materials is high-grade steel, a primary component in bearing manufacturing. Consequently, shifts in global steel prices or supply disruptions can trigger price variations, scarcity of materials, and consequent profitability challenges, ultimately impacting bearing production.

Bearing manufacturers confront notable hurdles due to the expanding digitalization of the value chain encompassing design, production, procurement, and maintenance. The integration of novel technologies is uneven due to varying capabilities. The bearing industry contends with dual challenges: counterfeit products and the influx of inexpensive imports. Counterfeit items have far-reaching consequences, eroding brand reputation and presenting safety and financial risks to consumers. Meanwhile, the threat of cheap imports lies in their potential to underutilize resources. Bearings, primarily crafted from high-grade or alloy steel, are susceptible to fluctuations in global steel prices, further complicating the industry landscape.

SEGMENT-WISE-PERFORMANCE

Galaxy Bearings is the most trusted supplier in the industry for bearings. It operates in a single segment, namely in "ball and roller bearings", which are used in widespread applications across industries. The Companys world-class manufacturing facilities.

INTERNAL CONTROL SYSTEMS

The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

FINANCIAL PERFORMANCE

During the Financial year 2022-2023, the Company has earnings before interest, depreciation and tax amounting to Rs. 2365.51 Lakhs after providing for finance cost of Rs. 28.22 Lakhs and depreciation of Rs. 174.09 Lakhs, Profit before tax comes to Rs. 2163.20 Lakhs which was Rs. 1782.60 Lakhs during the financial year 2021-2022.

HUMAN RESOURCES

Employees serve as the cornerstone of a companys success. Our Human Resource Team assesses their strengths, potential, and dedication to work, recognizing their pivotal role. Fostering an environment where employees are empowered to make decisions and drive initiatives for improvement is paramount. We prioritize cultivating a safe and motivating workspace. Regular appraisals have been ingrained in our approach, acknowledging talent and fostering long-term commitment to the organization.

CAUTIONARY STATEMENT

Statements in this report on Managements Discussion and Analysis describing the Companys objectives, projections, estimates, exceptions or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and exceptions of future events. Actual results could however differ materially from those expressed or implied. The Company assumes no responsibility in respect of forward-looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.

For and on behalf of the Board of Directors

For Galaxy Bearings Limited

Date: August 10, 2023	Bharatkumar Ghodasara	Jyotsna Vachhani
Place: Ahmedabad	Whole-time Director	Director
	DIN:00032054	DIN: 00535817