Hercules Hoists Management Discussions


Industry Structure and Development:

Material handling equipment facilitates the movement, storage, and control of products & materials across their entire lifecycle, from manufacturing, warehousing, distribution, to disposal processes. The Company offers the entire gamut of solutions for overhead material handling including lifting, moving, and storing. The products and solutions offered by the Company cover mechanical hoists (chain pulley blocks, ratchet lever hoists, pulling & lifting machines), electric chain hoists, electric wire rope hoists, cranes (hoist one track crane, electric overhead travelling crane, light profile, jib cranes), storage and retrieval solutions including floor operated stackers, roll out racks, winches and manipulators etc. through its trusted and well-known brands of ‘Bajaj Indef, ‘iStacker, iCrane and ‘Stier.

The Company provides capital equipment and solutions that are utilized in a variety of industrial verticals, including automotive and auto ancillary, energy and power, infrastructure, heavy and light engineering, steel and metals, chemicals and petrochemicals, logistics, textile and food processing. Companys products are used by organizations of all sizes, ranging from large companies to independent contractors and are applicable to both private and public sectors. The Company has two production facilities, located in Khalapur in District Raigad, Maharashtra and Chakan in District Pune, Maharashtra, where it manufactures its products and solutions.

The Company places a strong emphasis on utilizing the latest technology and maintaining a high standard of quality. As evidence of this commitment, its quality systems have been certified to meet the ISO 9001:2015 at its our Khalapur and Chakan plants and ISO 14001:2015, and ISO 45001:2018 standards at its Khalapur plant. Additionally, its products Chain pulley blocks, electric chain hoists, and wire rope hoists are certified to meet ISI and CE standards. To ensure consistent high- quality production, the Company has invested in various high-end manufacturing equipment. It also works with a network of suppliers and vendors to source components and materials, and continuously strives to improve the quality and capabilities of its supply chain partners. The Company takes pride in its dedication to excellence and the ongoing pursuit of technological advancements to meet the needs and expectations of its customers.

The Company has established a robust distribution and service network across India through our Authorized Business Partners (ABPs) and sub-dealers. To further expand its customer reach for its our solution business, it has set up direct sales offices in Mumbai, Pune, Delhi, Chennai and Kolkata. To ensure that its customers receive excellent after-sales support, the Company has a dedicated team of service engineers who are equipped with the latest tools and technology. The Company, on a regular basis, organizes training sessions for all its ABPs, which help them to better understand products and provide efficient and effective after-sales support to its customers. It believes that that customer satisfaction is the key to its success, and it will continue to invest in its service network and training programs to meet and exceed its customers expectations.

Opportunities and Threats:

Intrinsic Factors

The Company has recognized the importance of its brand value and has taken steps to enhance it through a rebranding effort that incorporates the Bajaj Groups legacy of 96 years. By symbolizing the Companys strong foundation and long-term vision, and emphasizing its commitment to integrity, honesty, and transparency, the new logo for Bajaj Indef can help to reinforce the Companys reputation for reliability and continuity. Its products are designed to improve productivity and safety while maintaining a low cost of ownership throughout the entire lifecycle of the product. It is committed to leveraging its service strengths through its business partners to provide high-end products and solutions. To expand its market reach in the digital space, it is investing in market research and digital marketing.

The Company believes that its continued investment in technological improvements both in-house and with external technology partners will enable it to consolidate and strengthen its market position, both domestically and internationally.

Extrinsic Factors

The industrial and infrastructure developments have been playing a vital role in the Indian economy. Growing investments in the infrastructure sector and other strategic initiatives of the Government, are likely to boost the capital goods, logistics, warehousing, and construction sector in the country, in turn, boosting the demand for material handling equipment in the country. The Company has been agile enough to adapt to such changing environments over the past years and has shown that it can handle such disruptions. The Company is also working towards reducing its import dependence and strengthening its local supply chain. The material handling industry is also expected to gain from robust demand from resource heavy industries like steel, cement, automobile & auto ancillaries, tire, power, minerals, other infrastructure sector, food processing, pharma, chemicals, irrigation etc.

Financial Review / Segment wise Performance:

(Rs. in lakhs)

Particulars

FY 2022-23 FY 2021-22 Growth %

Revenue from operations/ segment performance

15,077.08 10,844.62 39.03%

Material Handling Equipment

15,051.52 10,739.16 40.16%

Windmill

25.56 105.45 (75.76%)

Earnings before interest, tax, depreciation, and amortization [EBITDA]

3,439.92 2,286.31 50.46%

Profit after Tax [PAT]

10,330.71* 1,494.01 591.48%

* Includes profit of Rs. 8,696.16 Lakhs on sale of mulund land and loss of Rs. 73.46 Lakhs on sale of windmill.

The revenue from operations of Rs. 15,077.08 lakhs is up by 39.03% as compared to the previous years revenue from operations of Rs. 10,844.62 Lakhs. The profit after tax of Rs. 10,330.71 lakhs, is up by 591.48%, as compared to previous years net profit of Rs. 1,494.01 lakhs.

Internal Control Systems and their adequacy:

The Company has adequate internal control systems commensurate with its size and nature of business. The Company has engaged the services of a reputed internal audit firm. The audit committee and the Board reviews the performance of the audit and the adequacy of internal control systems and compliance with regulatory guidelines. The Companys management takes corrective actions based on recommendations received from internal auditor and the audit committee.

Risks and Concerns:

Every business has an inherent element of uncertainties owing to uncertain factors and risk mitigation and management is critical for the success of the enterprise. The Company has a Risk Assessment and Management Policy, wherein the Company has identified key risks including market information (product, price and competition), competition risk (competition from Chinese, European, local organized and un-organized sector), employee risk (health and retention), supply chain impact (disruptions in raw commodities and SME vendors) and credit risk (recovery of outstanding dues). Risk mitigation and management steps are regularly undertaken, and reports are placed before the audit committee meetings and Board meetings. This enables the Company to proactively manage risks and make informed decisions that help it achieve its business objectives.

Business Out-look:

The Companys business is directly linked to investments in new projects, expansion of existing capacities and positive sentiments in industrial production activities. In 2022-23, there was demand from capex industry and positive vibes from Government towards capex investment. With a customer-centric approach, the Company is focused on becoming more competitive in the market. The Company is dedicated to putting its our customers at the center of its operations. To remain competitive in the market, the Company is continuously working to enhance its supply chain efficiency, optimize costs and refine its product portfolio. The Company is also investing to expand its domestic and export market reach. By prioritizing its customers and committing to ongoing innovations, the Company is confident that it can continue to move forward in the path of growth and success .

Development in Human Resources / Industrial Relations front:

The Company recognizes that people are the prime assets of an organization and implements initiatives to train and motivate them. The Company continues to focus on attracting and retaining the right talent by giving them the right opportunities. The selected candidates undergo a structured induction program, which gives them a good exposure and become a good contributor in growth of the Company. Industrial relations during the year have been cordial and contributed to mutual development.

Cautionary Statement:

Statements in the Management Discussion and Analysis, describing the Companys growth prospects, are forward-looking statements. The actual results may vary, depending upon economic conditions, raw-material prices, government policies, regulations, tax laws and other incidental factors.

For and on behalf of the Board of Directors

Shekhar Bajaj

Dated :26/05/2023

Chairman

Place : Mumbai

(DIN No. 0089358)