Him Teknoforge Ltd Management Discussions.


HIM Teknoforge Limited [Formerly known as Gujarat Automotive Gears Limited (GAGL)] is a leading name in the manufacture of auto and tractor components in domestic as well as international markets. With consistent commitment to superior quality and on the strength of robust performance of its products, HIM Teknoforge Limited has earned national and international acclaim and appreciation.

Our products include transmission gears, pins, axles, shafts, propeller shaft components, non-gears component, fork-lift parts, off-road parts and many more.

Global Economy

The landscape of the global automobile sector is undergoing a transformation. Intelligent mobility and ACES (trends in Autonomous, Connected, Electric and Shared technology) have disrupted business models of automotive companies.

The global automotive industry in 2020-21 witnessed a slowdown amidst these and other disruptions. The impact was further amplified with a sharp contraction in the worlds largest auto market in China and implementation of WLTP (Worldwide harmonized Light duty vehicle Test Procedure) in Europe.

Automobile Industry - Structure & Development

India is considered to be the worlds 4th largest automobile industry, ahead of Germany. It is on its way to becoming the 3rd largest, riding on rapid economic development, rising urbanisation, burgeoning middle class, supportive regulations and the Governments strong push for growth in the form of the Atmanirbhar Bharat and other initiatives.

The Government aims to develop India as a global manufacturing as well as a research and development (R&D) hub. It has set up National Automotive Testing and R&D Infrastructure Project (NATRiP) centres, as well as a National Automotive Board to act as facilitator between the Government and the industry.

The domestic automotive industry has been adopting new technology and capabilities in order to keep pace with the changing global landscape. The diversified nature of the domestic automotive industry not only provides scale, but also the risk-hedging ability to face market vagaries.

Opportunities and Threats Opportunities

The industry is supported by factors such as the availability of low-cost skilled labour and low-cost steel production. Indias automobile industry has the potential to generate up to $ 300 billion in revenue by FY 2026, generating 65 million additional jobs and contributing over 12% to Indias GDP.

The Governments push to develop India as a global manufacturing and R&D hub is also lending heavy support to the automobile sector.

India is fast being recognised as a hub for high-quality managerial talent too. Domestic players have been leveraging local talent for driving innovation through R&D centres, driving growth in the medium-to-long term. In the next few years, the automobile sector is expected to record robust growth, given the infrastructure push from the Government and schemes like PMGSY.

The opportunities generated by the disruptions are changing the competitive game for players willing to step beyond their traditional roles and engage with customers in a new and digital environment.


The presence of a large number of players, domestic as well as multinational, in the automobile industry, results in intense competition. Moreover, the Government of Indias aim to propel the Indian Automotive Industry to be the engine of the "Make in India" programme will intensify competition as existing entities will have to compete with established as well as new entrants into the market, which enjoy some privileges under the "Make in India" initiative.

Segment-wise or Products-wise Performance

The operations of the Company are limited to one segment, namely automotive components.

Business Operations

The Company has fully functional units located in Vadadora- Gujarat, Baddi-Himachal Pradesh and Pithampur-Madhya Pradesh.

While it continues with its legacy of operational efficiency, factors such as technological advancements and product innovation continue to be its key drivers of differentiation. Enhanced productivity through retrofitting and refurbishing of machines and optimising efficiencies at various levels has enabled the Company to achieve an improved performance and gain a competitive edge.

The Company is investing substantially to upgrade its facilities. It has added CNC machines, the latest heat treatment facilities and state-of-the-art equipment to cater to its customer requirements. During the year under review, the Company installed two brand new CNC Screw Presses of 1,600 Tonne and 1,000 Tonne each to enter the warm forging space, along with a Cold Coining Press of 1,000 Tonne.

To further enhance its toolroom and standard room, the Company has also installed CNC Gear testing equipment and

multiple VMC machines. New Sealed Quench Furnaces have been added recently to further upgrade the heat treatment facilities. Furthermore, the Company even set up a brand new state-of-the-art facility for 100% exports in the Western parts of the country to further increase its export share of business.

Resource Upgradation

The Company has undertaken retrofitting and reconditioning of old conventional machines. This has significantly improved efficiency and considerably enhanced throughput. Besides, investments have been made to replace certain machines with state-of-the-art versions to increase productivity and reduce downtime.

Technology Upgradation

The Company has undertaken multiple efforts to upgrade its technological base. The plants have commissioned new machines in key areas like gear cutting, forging presses and heat treatment. These latest generation machines have boosted efficiency and the quality of output.

HIM Teknoforge Limited has upgraded its manufacturing capability by entering the warm forging space and developed the complete spider kit through warm forging, a technology which is available with very few companies in the country.

In a conscious decision to move towards green energy for its manufacturing facilities, your Company has set up two rooftop solar power plants, of 500kw and 175kw, for its facilities, located at Pithampur, MP and Vadodara, Gujarat respectively.


Looking ahead, we plan to continue expanding our portfolio of Automotive products and strategically expand our design and manufacturing capabilities. We are also working specifically on developing our manufacturing capabilities.

In the area of manufacturing, we also envisage implementing additional measures to improve processes and create transparency with the strategic introduction of modern systems. We are also working specifically on developing our manufacturing capabilities and processes to support further growth.

HIM Teknoforge continues to maintain its robust reputation among its clients and in the market for its products. The management is confident that with an improvement in the economic environment and further developments within the organisation, the ongoing investments will deliver the expected benefits. These developments will form the foundation for the Companys ability to tap into opportunities for continued expansion and positive development of the business over the next few years.

Risks & Concerns

Your Company regularly evaluates and reviews potential risks on account of various factors such as Government policies, uncertainties in the global economic environment, etc. Apart from these, the Company is exposed to changes in foreign exchange rates and commodity prices, competition, human resource risk and industrial safety, employee health and safety risks.

The management of your Company has put in place adequate risk management systems to minimise and/or eliminate the adverse impact, if any, of these risks. (For more details, please refer to Point 26 of the Board Report)

Internal Control Systems and their Adequacy

The Audit of Internal Control Systems is carried out by an independent firm of Chartered Accountants on a quarterly basis and corrective actions are taken where shortcomings are identified. The Internal Auditors submit their quarterly reports to the Audit Committee and the Board of Directors. All the fixed assets of the Company are physically examined and recorded at regular intervals.

Discussion on Financial Performance with Respect to Operational Performance

Your Company has achieved turnover of Rs.23,889.48 Lakhs for the FY 2020-21 as against turnover of Rs.22,311.27 Lakhs in the previous FY 2019-20. Further, the Company earned a profit of Rs.513.90 Lakhs in the FY 2020-21 as compared to Rs.324.63 Lakhs in FY 2019-20.

Particulars Quarter Ended 30-06-2020 Quarter Ended 30-09-2020 Quarter Ended 31-12-2020 Quarter Ended 31-03-2021 Year Ended 31-03-2021
(a) Revenue from Operations 2,559.44 5,754.73 7,073.90 8,501.40 23,889.48
(b) Other Income 7.09 37.95 71.17 134.84 251.04
Total Income from Operations 2,566.53 5,792.68 7,145.07 8,636.24 24,140.52
Profit/(Loss) before tax (3 +/- 4) (373.38) 243.02 419.83 426.96 716.41
Total Comprehensive Income for the period (8 +/- 7) (403.18) 212.83 379.69 345.46 534.79

Material Developments in Human resources/Industrial relations front, including number of people employed

We regard human resources as our most valuable asset and proactively review and evolve policies and processes to attract and retain good people. We also make continuous efforts to upgrade the knowledge and skills of our present employees. As new business challenges emerge, we will remain a learning organisation that supports operational excellence improvement and rising standards of performance at all levels. During the FY 2020-21, the total number of persons employed with us were 1,186.

Details of Significant Changes in Financial Ratios:

Details of significant changes as compared to the immediately previous financial year in key financial ratios, along with detailed explanations therefor, including:

Particulars FY 2019-2020 FY 2020-2021
(i) Debtors Turnover 7.86 6.97
(ii) Inventory Turnover 15.93 13.73
(iii) Interest Coverage Ratio 1.86 2.06
(iv) Current Ratio 1.20 1.29
(v) Debt Equity Ratio 0.30 0.34
(vi) Operating Profit Margin (%) 26.62% 24.34%
(vii) Net Profit Margin (%) 1.39% 2.24%

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

Particulars FY 2019-2020 FY 2020-2021
Return on Net Worth 2.28% 3.72%

Disclosure of Accounting Treatment:

The financial statements for the year ended 31st March, 2021 have been prepared as prescribed in accounting standards and accounting policies and have been followed consistently. There is no change in treatment of the said accounting standards & accounting policies, therefore, no explanation by the management is required for the same.

For and on behalf of the Board
Vijay Aggarwal
Dated: 13.08.2021 Chairman
Place: Baddi DIN:00094141