honda india power products ltd share price Management discussions



• After resumption of economic activity subsequent to Covid-19 pandemic, demand of generators from small commercial establishments picked up to cater to back-up demand.

• However, the demand arising out of natural disasters was less during Financial Year 2022-23 thereby having a small proportion of this component in overall sales. Institutional demand was up in the fourth quarter of the Financial Year 2022-23 due to enhanced spending on infrastructure.


• Revival of economic activities and operations in the Country, especially in small and medium size businesses, together with expected portable power back up demand is on growth path.

• New sectors like mobile pet clinics, perishable medicine/ food delivery vans are opening up and the Company expects to grow in these sectors.

• The Companys promotions focus mainly on urban, semi-urban and rural markets to leverage pent up lifestyle requirements from consumers, are expected to help the Company penetrate in fuel efficient and reliable offerings.


• Peak power deficit continues to be within acceptable limits, primarily due to growing power generation. Interim demand of our products in urban areas, driven by long-haul power cuts, has thus been reduced considerably.


• Portable generator demand is expected to grow at a normal pace especially due to the emerging start-up sector and opening up of new avenues.


• Unseasonal and longer stretches of monsoon led to a decline in Water Pump sales in the Financial Year 2022-23, especially in Eastern, Central, and Southern markets. State and Central Governments overall support mechanism towards farming and fisheries sectors were not up to the expectations of the consumers and businesses.

• The Companys macro strategy to expand sales, based on "application and solutions", gave it inroads into mechanization needs of the construction segment.

• Two new Water Pump models, which were launched last year, helped the Company to strengthen its market leadership position with existing line up of a large range of models catering to different demands.

• The Companys targeted outreach in coastal areas and waterways by setting up support for the travel and fishing segment, has started yielding good results and is creating shift of the consumer from manual labour to mechanization.

• The Governments planned investment in irrigation projects is expected to help fuel-based engine demand. Continued supply chain requirements, towards agriculture produce/products, ensured demand and need for farm operation products and services. Companys demonstration activities, supported through vans and manpower deployment, are well received and is helping the Company in creating new markets.


• Increasing investments in agricultural infrastructure was one of the key factors bolstering the growth of the market in India. Additionally, the Government of India is adopting schemes, reforms, policies, and programs to increase the income of farmers in the country. Growing reliance on ground water for agricultural purposes is driving the market.

• Due to shortage of labour in urban areas after Covid-19 era, mechanization in small construction segments is growing and expected to ramp up the demand for our Engines.

• Growing awareness to address environmental concerns is creating demand for more fuel-efficient 4 Stroke Engines and Water Pumps.


• Complexities in subsidy policy and its disbursement by the State and Union Governments, is leading to delay in purchase by the end customers. The Company endeavours to closely follow up with field team to have a deeper understanding of the process.


• Government of Indias ambitious goal of doubling farmers income has started showing good results. The agriculture sector in India is expected to generate better momentum in the next few years due to increased investment and support in agricultural infrastructure such as irrigation facilities, warehousing, and cold storage.

• In line with the aforementioned the Company is pursuing to develop multi-channel structure in the country across various segments for application related products and equipments. The Companys thrust in tying up with small, medium and specialized partners is expected to build much-needed ecosystem of cost competitiveness and application specific product sales and services.


• Hondas range of fuel efficient and reliable Brush Cutters are specifically suited for mechanized solutions for farm activities like de-weeding and harvesting.

• The Company is maintaining its leadership position in 4 Stroke Brush cutter segment with major stronghold in North and South Indian markets.

• Our complete portfolio of fixed shaft, flexible shaft and high- powered variants provide matched solutions to the needs of frequent and professional users respectively.


• The Companys focus towards agriculture mechanization was strongly led by its complete range of Tillers.

• The new Tiller, launched in previous year, gained momentum in the overall cash market and helped to penetrate further into the end customer requirements, currently being fulfilled by the local players.

• The Financial Year 2022-23 was very challenging due to the complex processes and inaccessibility of various subsidy schemes of Center and State Governments. This resulted in withholding of purchases by the end customers, in anticipation of the release of subsidy schemes by the government, which, however did not come up at the end.

• Horticulture - segment is highly labour intensive and dependent on various schemes. Honda Tillers are creating a place for themselves amongst such Horticulture farmers, growing vegetables and cash crops. The Company is expecting continued support of Centre and State Governments to make Tillers more accessible through its various schemes.



• 7kVA genset business is growing with prominence with good demand from across the globe. Major established markets are

North America, Europe and Australia while Middle East and Southeast Asia are showing emerging trends.

• Engine business from the North Americas - OEM applications continues to be the highest among all product categories till now.

• Tillers and Gasoline Water Pumps are two future product categories with immense potential to grow in mainly Asian markets. Other than Nepal, Sri Lanka, South Korea and Taiwan, where our small tiller has earned good customer acceptability, the new market developmental activities are yielding good results in expansion of business of Agricultural products to Asian markets such as Bangladesh and Philippines.


• Uncertainty of Engine business with North Americas OEM is expected to have adverse impact on future export sales projections and thereby affecting utilization of full production capacity in 2023-24 onwards.


• Expansion of business in new markets through distributor network of both Asia-Oceania and other regions, by introducing new GX80 engine and GX80 engine-based products, besides 1 and 7 kVA gensets.


Profit before Tax and Exceptional Items for the year was 13,290 Lakh as against 10,006 Lakh in 2022-23.

Key Financial Ratios of the Company which has significant change (i.e. more than 25% change) compared to last year are as follows:

FY 2022-23 FY 2021-22
Operating Profit Margin (%) 9.13 7.20

The return on net worth during the Financial Year 2022-23 was 12.10% as compared to 11.69% in the Financial Year 2021-22.

For a detailed explanation of change please refer to Note 34 of Notes to Financial Statement.


Your Company has been helping peoples dreams come true for over 37 years now. We are expanding and deepening our focus to create higher positive impact - by providing the right opportunities, sharing wealth equitably, manufacturing responsibly and approaching business conscientiously. In essence, we are focusing on Environmental, Social and Governance (ESG) factors through sustained, focused programs.

The world has entered a new era where the business landscape has changed completely. Organizations have become more agile and responsive to change - be it climatic, political or economic. Customer behaviours too have changed. Recent volatility has adversely impacted world economies and global communities alike. For the world to prosper in the years to come, everyone must work towards the common cause of sustainable upliftment for all.

Our employees are our brand ambassadors who are contributing to making it happen. They bring vigour, dynamism, energy and ideas every day to not only deliver product and service excellence, but also play a significant role in helping us fulfil our aspirations in this new era. In turn, we engage with our employees, invest in their professional development, provide them with a meaningful purpose, focus on their health and safety, celebrate innovation and out-of-the-box thinking, support well- reasoned risk-taking and reward our employees for their performance.

Your Company is powered by people. We constantly strive with our human capital to stimulate and harness a critical competitive edge. We consistently invest to unlock the leadership potential of our people and help them drive excellence at the Company.

We have a robust performance management system built to uphold a culture of meritocracy. The overall objective of the performance management system is to ensure that there is alignment between an individuals goals and the organizations goals and priorities. A key highlight of the new performance system includes the overall appraisal process on an online platform through SAP and is simple, enhances leadership and manager accountability, rewards and encourages outperformance and aims at creating a strong merit-based culture. Feedback/development conversations between people managers and direct reports being key at every stage.

With the objective of capability building, developing a future ready workforce and fostering togetherness at the workplace, your Company implements multiple training and engagement programs on an ongoing basis. These include various behavioural and functional programs such as safety and environment, quality tools, TPM, continuous improvement, result orientation, relationship management, decision making and programs on skill building.

Your Company is an equal opportunity provider with a strong focus on fostering Diversity and Inclusion (Dandl) in the workplace. There is no unfair treatment concerning employment, promotion or other related issues, or termination of the employment, for reasons of gender or disability. Structured hiring programs that attract and recruit diverse talent through mindful and positive communication, specialized hiring consultants and deeper engagement channels. Improved gender diversity in areas of business operations is also going to be a thrust area for the Company. Your Companys focus continues to propagate proactive and employee-centric practices.

The transformational work culture initiative that aims to create an engaged workforce with an innovative, productive and competitive ecosystem continues to grow in strength. Proactive and employeecentric practices, a focus on transparent communication of business goals, an effective concern resolution mechanism and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Companys employee relations approach. An ‘Open Door Policy with constant dialogue to create win-win situations has helped your Company build trust and harmony.

The industrial relations scenario continued to be largely positive across the Organization. The sustained efforts towards building a transformational work culture resulted in zero production loss in the Financial Year 2022-23 and helped create a collaborative, healthy and productive work environment.

Our CSR approach is to invest in impactful social programs and work with stakeholders to drive positive, sustainable and inclusive change in society. Through our various long-term social initiatives, we have positively impacted child education and environment rejuvenation. The Company as on March 31,2023, had 754 associates.


Your Company is comprehensively embracing information technology to leverage its potential and sail through the changes. Business operations continuity being the utmost priority is focused through synergetic initiatives towards internal as well as external multi-level security of data and data encryption.


Statements in this Management Discussion and Analysis Report describing the 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 the Companys operations include significant changes in political and economic environment in India and key markets abroad, tax laws, litigation, labor relations and interest costs.